Oil prices rose slightly on Monday on growing concerns about potential supply disruptions in the oil-producing Middle East region, after Israel stepped up attacks on Iranian-backed forces.
Brent oil futures for November delivery rose 16 cents, or 0.22 percent, to $72.14 a barrel at 0043 GMT. That contract expires Monday and the more active contract for December delivery gained 10 cents, or 0.14%, to $71.64.
West Texas Intermediate crude oil futures gained 8 cents, or 0.12%, to $68.26 a barrel.
Last week, Brent fell about 3%, while WTI fell about 5%, as concerns about demand grew after fiscal stimulus from China, the world’s second-largest economy and leading oil importer, have failed to reassure the market.
However, prices were supported on Monday by the possibility of a worsening conflict in the Middle East involving Iran, a key producer and member of the Organization of the Petroleum Exporting Countries (OPEC), after Israel stepped up its attacks on Iran-backed Hezbollah and Houthi militant groups.
“The recent escalation of attacks in the Middle East increases the likelihood that Iran will be directly involved in the conflict, posing a significant risk of supply disruption for the OPEC producer,” ANZ Research said in a note.
Israel said it bombed Houthi targets in Yemen on Sunday, widening its confrontation with Iran’s allies, two days after killing Hezbollah leader Sayyed Hassan Nasrallah in an escalation of the conflict in Lebanon.
US Defense Secretary Lloyd Austin has authorized the military to increase its presence in the Middle East. The Pentagon said Sunday that if Iran, its partners or proxies target U.S. personnel or interests, Washington “will take all necessary measures to defend its people.”
Later on Monday, markets will wait for Federal Reserve Chairman Jerome Powell to give clues on the speed of the Fed’s monetary policy easing, with seven other Fed policymakers scheduled to speak this week, the ANZ note added.
However, prices remain under pressure as OPEC and its allies, known as OPEC+, plan to increase production by 180,000 barrels per day in December and Libya’s oil exports are also expected again .
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