Oil prices climb as Middle East tensions escalate

Oil prices rebounded this week after a nearly 8% decline last week, as traders monitored escalating tensions in the Middle East that could threaten supplies.

Meanwhile, China is taking steps to bolster its economy, the world’s largest oil importer, News.Az reports, citing foreign media, News.Az reports, citing foreign media.

Global benchmark Brent rose above $73 a barrel, while West Texas Intermediate was near $70. On Saturday, a Hezbollah drone exploded next to Prime Minister Benjamin Netanyahu’s private home , and the following day Israel opened up a fresh military assault on the group’s strongholds in Lebanon. Israel has already vowed to retaliate against Iran for a missile attack at the start of October.

In Asia, China cut its benchmark lending rates on Monday after the central bank lowered interest rates at the end of September as part of a series of measures to revive growth. Speaking in Singapore, Saudi Aramco Chief Executive Officer Amin H. Nasser said he is bullish about the nation’s consumption.

Crude has had a volatile month, with traders balancing risks to flows from the Middle East — where Israel is facing off with Tehran and its proxies — against signs of soft demand in China. At the same time, the International Energy Agency has said rising global supplies could lead to a surplus next year, with OPEC+ set to restore some shuttered capacity in stages from December.

While Middle East tensions remain elevated, Brent’s metrics point to physical conditions becoming less tight. The crude benchmark’s three-month spread has narrowed to 90 cents a barrel in backwardation, down from $1.61 about one month ago, and well below levels that were above $2 three months back.

News.Az