Oil prices up amid rising supply concerns

By Duygu Alhan

Oil prices rose on Tuesday as the ongoing conflict between Israel and Palestine boosted fears that the clashes could turn into regional turmoil, disrupting oil supply routes.

International benchmark crude Brent traded at $86.61 per barrel at 10.55 a.m. local time (0755GMT), up 0.30% from the closing price of $86.35 a barrel in the previous trading session on Monday.

American benchmark West Texas Intermediate (WTI) at the same time traded at $82.58 per barrel, up 0.32% from Monday's close of $82.31 per barrel.

Oil prices spiked amid rising supply worries fueled by Israel's widening air and ground attacks on the Gaza Strip, which has been under relentless airstrikes since a cross-border attack by Hamas on Oct. 7.

The ongoing conflict between the two nations heighten concerns that the clashes might escalate into a regional turmoil that would disrupt oil supply routes, deepening the supply deficit predicted for the rest of the year.

Fears of a possible disruption in Iranian oil flow, fueled by the US saying Iran is responsible for attacks on US forces in Syria and Iraq, also put upward pressure on oil prices.

However, rising demand worries ahead of a US Federal Reserve meeting on Wednesday, which is anticipated to keep the policy rate high for longer than expected, limited upward price pressures.

Concerns that China, the world's largest oil importer, may see a downturn in oil consumption as a result of weaker-than-expected factory activity data also restrained additional price hikes.