Global oil prices rose for the fifth consecutive session on Monday, extending last week’s gains of more than 3% as fears of a U.S. recession eased and ongoing geopolitical tensions in the Middle East lent further support to the market. By 0458 GMT, Brent crude futures had increased by 22 cents, or 0.3%, to reach $79.88 per barrel, while U.S. West Texas Intermediate (WTI) crude futures climbed 36 cents, or 0.5%, to settle at $77.20 per barrel.
The recent surge in oil prices is attributed to a combination of favorable economic indicators from the United States and escalating concerns over potential retaliation by Iran and Hezbollah following the assassinations of key Hamas and Hezbollah leaders. According to IG markets analyst Tony Sycamore, “Support is coming from last week’s better-than-expected U.S. data which eased fears of a U.S. recession.” He added that the market is also anxious about the timing of Iran’s anticipated response to the assassinations, noting that it feels like a question of “when—not if.”
The geopolitical landscape in the Middle East has been particularly volatile, with Iran and Hezbollah both vowing to retaliate for the deaths of Hamas leader Ismail Haniyeh and Hezbollah military commander Fuad Shukr. The market is closely monitoring the situation, as any significant escalation could further disrupt oil supplies and drive prices higher. ING’s head of commodities research, Warren Patterson, commented on the situation, stating, “The market is still waiting for Iran’s response.”
In addition to these geopolitical concerns, the ongoing conflict in Gaza has further exacerbated tensions in the region. On Saturday, the Israeli military intensified its incursion into Gaza with an airstrike on a school compound, resulting in the deaths of at least 90 people, according to the Gaza Civil Emergency Service. However, Israeli authorities have disputed the death toll, claiming that the reported numbers were inflated.
As the market continues to react to these developments, analysts expect oil prices to remain volatile, with further increases likely if the situation in the Middle East deteriorates. The combination of easing recession fears in the U.S. and heightened geopolitical risks is likely to keep upward pressure on oil prices in the near term.
