Oil prices rise on concerns of wider Middle East conflict, US storm

KUALA LUMPUR : Oil prices rose on Tuesday on concerns the intensifying conflict between Israel and Hezbollah may impact supply in the key Middle East producing region and a tropical storm may impact output in the U.S., the world’s biggest crude producer, later this week.
Brent crude futures for November were up 21 cents, or 0.3 per cent, at $74.11 a barrel at 0030 GMT. U.S. crude futures for November were up 24 cents, or 0.3 per cent, at $70.61.
Both contracts closed lower on Monday as demand worries took precedence in investors’ minds after disappointing euro zone business activity and on lingering concerns about Chinese fuel consumption.
Israel’s military said it launched airstrikes against Hezbollah sites in Lebanon on Monday, which Lebanese authorities said had killed 492 people and sent tens of thousands fleeing for safety in the country’s deadliest day in decades.
Israel and Hezbollah, an Iranian-backed group based in Lebanon, exchanged fire after thousands of pagers and walkie-talkies used by Hezbollah members exploded last week. The attack was widely blamed on Israel.
Hezbollah has been trading fire with Israeli forces across the frontier since its Palestinian ally Hamas in Gaza and Israel went to war on Oct. 7.
“The oil market has been concerned that rising tensions in the region were dragging the OPEC oil producer closer to engagement,” said ANZ bank said in a note, referring to Iran.
“Traders are also keeping an eye on the weather. The U.S. Gulf Coast is at risk of a hurricane strike by the end of the week as a patch of turbulent weather in the Atlantic consolidates.”
U.S. oil producers were evacuating staff from Gulf of Mexico oil production platforms as forecasters predicted the second major hurricane in two weeks could tear through offshore oil producing fields.
The U.S. National Hurricane Center said a potential tropical storm southeast of the western tip of Cuba was expected to develop into a hurricane on Wednesday and intensify in the next 72 hours as it moves across the eastern Gulf of Mexico.