Market Analysis

Oil prices rose for the fifth consecutive session on Monday, maintaining the momentum from last week’s more than 3% gains. The increase was driven by easing U.S. recession concerns and ongoing geopolitical tensions in the Middle East.

By 0458 GMT, Brent crude futures were up 22 cents, or 0.3%, at $79.88 a barrel, while U.S. West Texas Intermediate crude futures increased by 36 cents, or 0.5%, to $77.20.

“Support is coming from last week’s better-than-expected U.S. data, which alleviated fears of a U.S. recession,” said Tony Sycamore, an analyst at IG markets.

“There’s also significant concern over when Iran might seek to retaliate against Israel for the assassination of key Hamas and Hezbollah leaders. It feels like a question of when, not if.”

Iran and Hezbollah have vowed to respond to the killings of Hamas leader Ismail Haniyeh and Hezbollah military commander Fuad Shukr.

“The market is still waiting for Iran’s reaction,” noted Warren Patterson, head of commodities research at ING.

Meanwhile, the Israeli incursion into Gaza escalated on Saturday with an airstrike on a school compound that reportedly killed at least 90 people, according to the Gaza Civil Emergency Service, though Israel disputed the reported death toll. On Sunday, Hamas expressed skepticism about participating in new ceasefire talks.

Brent ended last week with a gain of over 3.5%, while WTI rose more than 4%, buoyed by positive economic data and increasing expectations of a U.S. interest rate cut.

Three U.S. central bankers indicated last week that inflation seems to be cooling sufficiently for the Federal Reserve to consider cutting interest rates as early as next month.

Additionally, China’s consumer prices rose faster than anticipated in July, and U.S. weekly jobless claims fell more than expected last week.

Paraphrasing text from "Reuters" all rights reserved by the original author.