Oil Prices Rise on Fears of Wider Middle East Conflict

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Prices Rise on Fears of Wider Middle East Conflict

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices rose on Monday, paring last week's loss, on fears of a widening conflict in the Middle East following a rocket strike in the Israeli-occupied Golan Heights, which Israel and the United States blamed on Lebanese armed group Hezbollah.

Brent crude futures gained 20 cents, or 0.3%, to $81.33 a barrel at 0010 GMT. US West Texas Intermediate (WTI) crude futures climbed 9 cents, or 0.1%, to $77.25 a barrel.

Last week, Brent lost 1.8% while WTI fell 3.7% on sagging Chinese demand and hopes of a Gaza ceasefire agreement.

On Sunday, Israel's security cabinet authorized Prime Minister Benjamin Netanyahu's government to decide on the "manner and timing" of a response to the Saturday's rocket strike in the Golan Heights that killed 12 teenagers and children.

Iran-backed Hezbollah denied responsibility for the attack.

"Worries over escalating tensions in the Middle East prompted fresh buying, but gains were limited by lingering concerns of weakening demand in China," Reuters quoted Toshitaka Tazawa, an analyst at Fujitomi Securities as saying.

Over the past few weeks, hopes of a ceasefire in Gaza have been gaining momentum.

But Israel wants changes in a plan for a Gaza truce and the release of hostages by Hamas, complicating a deal to halt nine months of combat that have devastated the enclave, according to a Western official, a Palestinian and two Egyptian sources.

On the demand side, data released earlier this month showing that China's total fuel oil imports dropped 11% in the first half of 2024 have raised concern about the wider demand outlook in China, the world's biggest crude importer.

Meanwhile, US energy firms last week added oil and natural gas rigs for a second week in a row, boosting the monthly count by the most since November 2022, energy services firm Baker Hughes said in its closely followed report on Friday.



Europe Gas: Prices ease ahead of Trump-Putin phone call

Representation photo: Smoke is released from one of the chimneys of the Dora (Daura) Thermal Power Station in the Dora district in southern Baghdad on January 9, 2025. (Photo by AHMAD AL-RUBAYE / AFP)
Representation photo: Smoke is released from one of the chimneys of the Dora (Daura) Thermal Power Station in the Dora district in southern Baghdad on January 9, 2025. (Photo by AHMAD AL-RUBAYE / AFP)
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Europe Gas: Prices ease ahead of Trump-Putin phone call

Representation photo: Smoke is released from one of the chimneys of the Dora (Daura) Thermal Power Station in the Dora district in southern Baghdad on January 9, 2025. (Photo by AHMAD AL-RUBAYE / AFP)
Representation photo: Smoke is released from one of the chimneys of the Dora (Daura) Thermal Power Station in the Dora district in southern Baghdad on January 9, 2025. (Photo by AHMAD AL-RUBAYE / AFP)

Dutch and British wholesale gas prices eased on Tuesday morning as the market awaited any news on a potential peace deal between Russia and Ukraine but low storage levels remain a concern and weather forecasts are mixed.
The Dutch front-month contract inched down by 0.55 euro to 40.65 euros per megawatt hour (MWh) by 0917 GMT, LSEG data showed.
The Dutch May contract was down 0.68 euro at 40.57 euros/MWh, while the day-ahead contract eased by 0.20 euro to 40.80 euros/MWh, Reuters said.
In Britain, the day-ahead contract was down 1.01 pence at 101.75 pence per therm.
All eyes will be on the outcome of the call between US President Donald Trump and Russian President Vladimir Putin scheduled for 1300-1500 GMT and whether it may lead to a ceasefire in Ukraine, analysts at Energi Danmark said.
"Until then, the market is caught in uncertainty," they added.
Traders holding speculative long positions in the gas market have become nervous that a potential peace deal between Russia and Ukraine could see the resumption of some Russian pipeline gas into Europe, analysts at ING said in a note.
Meanwhile, fresh tensions in the Middle East, with new Israeli air strikes on Gaza, could provide some bullish market sentiment, said LSEG analyst Yuriy Onyshkiv.
"Later this week, warmer temperatures are expected but the long-term view still forecasts below seasonal normal levels which may continue to pressure gas storages," consultancy Auxilione said in its daily market report.
EU gas storage sites were last seen 34.84% full, compared with nearly 60% seen at the same time last year, data from Gas Infrastructure Europe showed.
In the European carbon market, the benchmark contract edged down by 0.12 euro to 69.99 euros a metric ton.