Oil prices rose in early trading on Monday, paring last week's losses, amid fears of a widening conflict in the Middle East following a rocket attack on the Israeli-occupied Golan Heights that Israel and the United States blamed on Lebanon's Hezbollah.
price movement
Brent crude futures rose 20 cents, or 0.3 percent, to $81.33 a barrel by 0010 GMT. U.S. West Texas Intermediate (WTI) crude futures rose 9 cents, or 0.1 percent, to $77.25 a barrel.
Last week, Brent lost 1.8 percent while West Texas Intermediate fell 3.7 percent due to weak Chinese demand and hopes for a ceasefire in Gaza.
On Sunday, the Israeli Security Cabinet authorized the government headed by Benjamin Netanyahu to decide on the method and timing of the response to the missile attack that occurred on Saturday on the Golan Heights, which resulted in the killing of 12 children and teenagers.
Hezbollah denied responsibility for the attack, the deadliest in Israel or its annexed territory since a Hamas offensive on October 7 sparked the war in Gaza.
The conflict has spread to several fronts and threatens to spill over into a wider regional war. Israel has vowed to respond to Hezbollah in Lebanon, and Israeli aircraft bombed targets in southern Lebanon on Sunday.
Concerns over escalating tensions in the Middle East prompted fresh buying, but gains were limited by lingering concerns over weak demand in China, said Toshitaka Tazawa, an analyst at Fujitomi Securities.
Over the past few weeks, hopes for a ceasefire in Gaza have gained momentum.
But Israel is seeking to make changes to a Gaza truce plan and release hostages held by Hamas, complicating a final deal to halt nearly nine months of fighting, according to a Western official, a Palestinian source and two Egyptian sources. Israel's military campaign in the Gaza Strip has wreaked massive destruction on the Palestinian enclave.
On the demand side, data released earlier this month showing that China’s total fuel oil imports fell 11 percent in the first half of 2024 has raised concerns about the broader outlook for demand in China, the world’s largest crude importer.
Meanwhile, U.S. energy companies added oil and natural gas rigs for a second straight week last week, boosting the monthly count by the most since November 2022, energy services firm Baker Hughes said in its closely followed report Friday.
