Oil Gains on Middle East War Flare-Up, Signs of China Stimulus
Oil rose on speculation that China is preparing more stimulus for its economy and concerns increased the conflict between Israel and Hezbollah could expand into a wider regional war.
West Texas Intermediate advanced about 1% to approach $72 a barrel while Brent traded around $75 a barrel. WTI gained 4.8% last week in its biggest weekly jump since February.
Hezbollah launched a barrage of rockets, missiles and drones toward northern Israel on Sunday, and Israeli counterattacks against the Iran-backed group in Lebanon killed more than 180 people on Monday. That's adding to concerns the war will worsen, threatening oil output in a region that supplies about a third of the world's barrels.
In China, the world's top oil importer, authorities announced plans for financial regulators to provide a rare briefing on the economy as the country cut a short-term policy rate. That fueled speculation officials are preparing more efforts to revive growth.
Increased stimulus from China could improve demand for crude, said Robert Yawger, director of the energy futures division at Mizuho Securities USA. Oil is still down this quarter on concerns that demand from China and the US will weaken amid rising output from non-OPEC nations.
It's "tough for crude oil to rally for size without China demand growth," Yawger said.
Meanwhile, a swirl of thunderstorms in the Caribbean and southern Gulf of Mexico has a 70% chance of becoming the Atlantic's next storm by Wednesday, the US National Hurricane Center said. Ahead of the storm, Shell Plc is preparing to shut in the Appomattox and the Stones oil facilities in the Gulf.
WTI for November delivery rose 0.9% to $71.66 a barrel at 10:26 a.m. in New York
Brent for November settlement advanced 0.7% to $75.03 a barrel
Source : Bloomberg
