Oil rises on risk of broadening Middle East conflict
By Shariq Khan
Aug 1 (Reuters) -Oil prices rose in early Asian trading on Thursday, extending strong gains in the previous session after the killing of a Hamas leader in Iran raised the threat of a wider Middle East conflict and on signs of strong oil demand in the U.S.
Global benchmark Brent crude futures LCOc1 rose 67 cents, or 0.8%, to $81.51 per barrel by 0007 GMT, while U.S. West Texas Intermediate crude futures CLc1 rose 69 cents, or 0.9%, to $78.60 per barrel.
The most active contracts on both benchmarks jumped about 4% in the previous session.
Hamas leader Ismail Haniyeh was assassinated in the Iranian capital Tehran on Wednesday, less than 24 hours after Lebanon-based Hezbollah's most senior military commander was killed in an Israeli strike in the capital, Beirut.
The killings fuelled concern that the 10-month-old war in Gaza between Israel and Hamas was turning into a wider Middle East war, which could potentially lead to disruptions in oil supply from the region.
"We fear the region is at the brink of all-out war," Japan's deputy United Nations representative Shino Mitsuko said on Wednesday as the U.N. security council called for stepped-up diplomatic efforts.
Also pushing up oil prices was a set of data releases from the U.S., the world's top oil consumer, and a weaker dollar.
Robust export demand pushed U.S. crude oil stockpiles lower by 3.4 million barrels in the week ended July 26 to 433 million barrels, data from the U.S. Energy Information Administration (EIA) showed on Wednesday.
U.S. oil stocks have declined for five consecutive weeks, the longest such streak since January 2021.
U.S. oil demand was at a seasonal record in May as gasoline consumption surged to its highest since before the pandemic, a separate data release from the EIA showed on Wednesday.
Meanwhile, the U.S. dollar index =USD extended losses on Thursday from the previous session, after the Federal Reserve held interest rates steady but left the door open for a cut in September. A weaker dollar can boost oil demand from investors holding other currencies.
Reporting by Shariq Khan in New York; Editing by Sonali Paul
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
