Oil prices surge 1% as Middle East conflicts fuel supply concerns
Shafaq News/ Oil prices climbed byaround 1% on Thursday, reversing some of previous session's losses, as MiddleEast tensions kept the market on edge ahead of the U.S. presidential electionamid expectations of strong distillates demand in fourth quarter.
Brent crude futures rose 77 cents,or 1%, to $75.73 a barrel by 0655 GMT, while U.S. West Texas Intermediate crudefutures climbed 82 cents, or 1.2%, to $71.59 as an exchange of heavy firebetween Israel and Hezbollah heightened supply concerns.
Oil prices have gained nearly 4% sofar this week, helping to trim last week's losses of more than 7%.
Oil markets are trying to reboundfrom last week's steep sell-off, said independent market analyst Tina Teng inan email, when concerns of weak demand and an oversupply may have caused anoverreaction in prices, while the Middle East conflict remains fundamentallyunchanged.
Israel launched strikes on theSyrian capital Damascus early on Thursday, Syrian state media said, the latestsuch attack alongside the war in Gaza.
This followed Israeli strikes onBeirut's southern suburbs a day earlier and after Hezbollah said it firedprecision guided missiles for the first time at Israeli targets.
The intensifying exchanges of firecome as Washington makes a final major push for peace between Israel andIran-backed groups Hezbollah and Hamas before the Nov. 5 presidential electionthat could alter U.S. policy in the Middle East.
Phillip Nova senior market analystPriyanka Sachdeva said in an email that there could be wilder marketfluctuations in a critical period in the run up to the election, which will beimmediately followed by the Federal Reserve's November interest rate decision.
Some analysts expect a win forformer U.S. President Donald Trump to potentially weigh on oil prices if hepursues policies that could add barrels to already ample supplies in themarket.
"Further potential (price)upside may be capped by the U.S. presidential election where...Trump is leadingover (Kamala) Harris based on current data from betting markets and Trump hasproposed making the U.S. a major oil supplier," said OANDA's senior marketanalyst Kelvin Wong.
While betting markets put Trumpahead, other polls show the result is currently too close to call.
On the oil demand front, supportcame from stronger demand for distillates, according to JP Morgan analysts in aclient note, which highlighted strong travel demand in Asia and consistentdrawdowns in distillate stocks in several major markets.
(REUTERS)
