Oil prices surged by 2% on Tuesday as escalating conflict in the Middle East overshadowed hopes for a ceasefire and traders focused on tightening supply conditions. Brent crude futures for December increased by US$1.75, or 2.4%, to settle at US$76.04 per barrel, while US West Texas Intermediate (WTI) for November delivery rose US$1.53, or 2.2%, to settle at US$72.09 per barrel before expiring.
The ongoing war in Gaza and Lebanon, combined with U.S. diplomatic efforts for a ceasefire, has so far failed to calm markets. Analysts remain sceptical, with no immediate signs of de-escalation from Israel as it continues its military campaign.
At the same time, signs of improving demand from China, the world’s largest crude importer, have supported the recent price rally. Beijing’s economic stimulus measures, including cuts to lending rates, are raising expectations for increased oil consumption. Goldman Sachs’ data showed China’s oil demand rose by 100,000 barrels per day last week, reaching a six-month high.
Meanwhile, global crude stockpiles continue to show signs of a tightening market, with analysts predicting a supply deficit in the fourth quarter.
Reuters
