Concerns about escalating conflict in Gaza pushed Asian oil prices higher
The latest clashes have raised fears that the conflict in Gaza could escalate into a wider regional war, pushing up Asian oil prices.
Asian oil prices extended their increase in the morning session of August 26, amid concerns that the conflict in the Gaza Strip could spread throughout the Middle East and disrupt the region’s oil supply. Meanwhile, the prospect of interest rate cuts in the US has improved the global economic outlook and boosted fuel demand.
As of August 26, Brent crude oil increased 37 cents (about 0.5%) to 79.39 USD/barrel, while US WTI crude oil increased 36 cents (about 0.5%) to 75.19 USD /bin. .
In one of the biggest clashes in more than 10 months, Hezbollah forces fired hundreds of missiles and drones into Israel on August 25, while the Israeli military said it hit Lebanon with about 100 fighters to prevent a larger attack.
The confrontation has raised concerns that the conflict in Gaza could escalate into a regional war.
Both major oil contracts rose more than 2% on August 23 after US Federal Reserve (Fed) Chairman Jerome Powell expressed support for upcoming interest rate cuts. Analysts at ANZ noted that the prospect of easing monetary policy has boosted positive sentiment across commodity markets. They also predict that the Fed will gradually implement a series of interest rate cuts.
Over the past week, oil prices fell due to the gloomy outlook of major economies, negatively impacting fuel demand.
On August 23, the US Department of Energy announced the purchase of nearly 2.5 million barrels of oil to supplement the Strategic Petroleum Reserve (SPR).
Baker Hughes, an American oilfield services company, the number of oil rigs operating in the country remained unchanged at 483 rigs last week.
