Oil extends gains for fifth session on Mideast tensions and US data

FE Team | Published: August 12, 2024 21:10:30

LONDON, Aug 12 (Reuters): Oil prices rose for a fifth consecutive session on Monday, extending gains from the previous week's more than 3 per cent rise, as US recession fears eased and Middle East supply risks provided support.
Brent crude futures were up 88 cents, or 1.1 per cent, at $80.54 a barrel by 1319 GMT while US West Texas Intermediate crude futures rose $1.06, or 1.38 per cent, to $77.90.
"Support is coming from last week's better than expected US data, which eased fears of a US recession," said IG markets analyst Tony Sycamore.
"There is also a great deal of anxiety about when Iran might look to avenge Israel's assassination of key Hamas and Hezbollah leaders. Feels like a matter of when, not if."
Iran and Hezbollah have vowed to retaliate for the assassinations of Hamas leader Ismail Haniyeh and Hezbollah military commander Fuad Shukr.
"The market is still waiting for Iran's response," said Warren Patterson, ING's head of commodities research.
In addition, the Israeli incursion into Gaza intensified on Saturday when an airstrike on a school compound killed at least 90 people, according to the Gaza Civil Emergency Service, though Israel said the death toll was inflated. Hamas cast doubt on its participation in new ceasefire talks on Sunday.
Brent gained 3.7 per cent last week while WTI rose by 4.5 per cent, buoyed by economic data and increased hopes of a cut to US interest rates.
Three US central bankers said last week that inflation appeared to be cooling enough for the Federal Reserve to cut interest rates as soon as next month.
China's consumer prices rose faster than expected in July, and US weekly jobless claims fell more than expected last week.
On Monday, Russia evacuated civilians from parts of a second region next to Ukraine after Kyiv increased military activity near the border only days after its biggest incursion into sovereign Russian territory since the start of the war in 2022.
Undermining price support, OPEC cut its forecast for global oil demand growth in 2024, citing weaker than expected data for the first half of the year and softer expectations for China. It also trimmed its expectations for next year.