Oil prices traded 2 percent higher on Monday as the fight in the Middle East ragged on amid heightened Israel retaliation against attacks by Iran earlier this month.
Brent crude rose by $1.23 or 1.68 per cent to close at $74.29 per barrel while the US West Texas Intermediate (WTI) crude was $1.34 or 1.94 per cent higher at $70.56 a barrel.
On Monday Israel reportedly attacked hospitals and shelters for displaced people in the northern Gaza Strip as it continued its fight against Palestinian militants.
International media also reported that Israel carried out targeted strikes on sites belonging to Hezbollah’s funding arm in Lebanon.
Meanwhile, the US Secretary of State, Mr Antony Blinken said the Israel ally will push for a ceasefire as he embarks on a journey to the Middle East.
According to the US State Department, the American government will be seeking to kick-start negotiations to end the Gaza war and ensure it also defuses the possibility of escalation in Lebanon.
Mr Amos Hochstein, a US envoy, will hold talks with Lebanese officials in the Lebanon capital, Beirut on conditions for a ceasefire between Israel and Hezbollah.
Support also came from China, as the world’s largest oil importer cut its lending rate as part of efforts to stimulate the country’s economy and offer investors relief.
This development will soothe worries after data showed that China’s economy grew at the slowest pace since early 2023 in the third quarter, fuelling growing concerns about oil demand.
The head of the International Energy Agency (IEA), Mr Fatih Birol on Monday said China’s oil demand growth is expected to remain weak in 2025 despite recent stimulus measures from the government.
He said this is because the world’s second-largest economy has continued to accelerate its Electric Vehicles (EV) fleet and this is causing oil demand to grow at a slower pace.
Meanwhile, Saudi’s state oil company, Aramco remains fairly bullish in comparison as its Chief Executive Officer (CEO), Mr Amin Nasser said there is more demand for chemical projects on the sidelines of the Singapore International Energy Week conference.