Investing.com — Oil prices rose in Asian markets on Monday as rising tensions in the Middle East prompted traders to set a larger risk premium and the prospect of lower interest rates raised hopes that demand would improve.
Oil prices recovered for the first time in two weeks from near three-year lows as supply disruptions from Hurricane Francine also suggested the market was tightening.
Crude oil maturing in November rose 0.5% to $74.83 a barrel and was up 0.4% to $70.41 a barrel as of 9:30 p.m. ET (1:30 a.m. GMT).
Fed rate cut lifts oil prices as more economic data awaits
Oil prices rose after the Federal Reserve sharply slashed interest rates last week, signalling the start of an easing cycle.
The move raised hopes that lower interest rates would boost economic growth in the coming months, which in turn would encourage higher demand for oil.
More information about the Fed is expected this week, with a string of officials scheduled to speak in the coming days. Data on the Fed’s key inflation measure is also due to be released on Friday.
In addition to the Fed, the Federal Reserve and the Central Bank of the United States are also scheduled to meet this week, and both are likely to cut interest rates.
Tensions in the Middle East continue
With few signs of an easing of tensions in the Middle East, traders appear to be adding a risk premium to oil prices.
Israel continues to attack Gaza and Lebanon, and fears of all-out war in the region remain. Hezbollah recently vowed to retaliate against Israel after it allegedly detonated several electronic devices used by the Lebanese group.
Constant fighting and the threat of war have raised concerns that escalating conflict in the Middle East could disrupt supplies in the oil-rich region, straining global markets.
