Oil prices rose after rising on Wednesday after reports that Iran's leader ordered a retaliatory strike on Israel for killing a Hamas leader on its soil.
Brent crude breached $81 a barrel after jumping 3.6% in the previous session, while West Texas Intermediate crude topped $78. The New York Times reported that Iran’s Supreme Leader Ayatollah Ali Khamenei had ordered a direct strike on Israel. This comes after Iran said Israel assassinated the political leader of Hamas in Tehran, shortly after a senior Hezbollah member was killed in Beirut.
Meanwhile, US officials are still pushing for a ceasefire in Gaza, but they acknowledge that it has become more difficult than ever after the death of Hamas political leader Ismail Haniyeh, a key player in the negotiations.
The escalation comes ahead of a review meeting of key members of the Organization of the Petroleum Exporting Countries and its allies. Delegates expect the group’s session later on Thursday to be routine, with no changes to plans to restore output starting in the fourth quarter.
Crude oil prices are still up this year despite posting a monthly decline in July as concerns about demand from top importer China mounted. The rally has been driven by tensions in the Middle East — the source of about a third of global crude — as well as OPEC+ curbs and expectations that monetary easing will boost U.S. demand. Federal Reserve Chairman Jerome Powell said Wednesday that an interest rate cut could come as early as September.
Away from the Middle East, official data showed that US crude inventories shrank by 3.4 million barrels last week. The fifth weekly decline in inventories was the longest losing streak since January 2022. Levels at the Cushing hub also fell.
