Oil prices up over growing supply concerns in Middle East

By Firdevs Yuksel

ISTANBUL (AA) - Oil prices rose on Monday amid concerns that increased conflict in the Middle East could disrupt regional supply and hopes that last week's US interest rate cut will support demand.

International benchmark Brent crude increased by 0.16% to $73.81 per barrel at 11.19 a.m. local time (0819 GMT), down from the previous session's close of $73.69.

US benchmark West Texas Intermediate (WTI) rose by 0.17% to $71.12 per barrel after closing at $71 in the prior session.

The market players are closely watching the events in the Middle East, where most of the world's oil reserves are located.

Renewed tensions in the key producing region increased concern for a possible output disruption and supported upward price movements.

The situation on the Israeli-Lebanese front with escalation between the Israeli army and the Lebanese Hezbollah group has reached a dangerous level that could ignite an all-out war.

Friday's Israeli airstrike on Beirut's southern suburb claimed the lives of 45 people, with 68 others injured, according to the Lebanese Health Ministry.

Lebanese Hezbollah said on Sunday that it bombed Israeli military-industrial complexes north of Haifa, with Israel saying five people were injured in the attack.

Hezbollah and Israel have been engaged in cross-border warfare since the start of the Israeli war on Gaza, which has killed over 41,400 people, mostly women and children, following a cross-border attack by Hamas on Oct. 7 last year.

Oil prices were also buoyed by the US Federal Reserve's (Fed) recent rate cut.

Last week, the Fed lowered its interest rate by 50 basis points to a range of 4.75%-5.0%, starting its monetary easing aggressively.

The move marked the first rate cut by the central bank in more than four years, since the beginning of the COVID-19 pandemic.

It pushed up hopes that lower rates would boost economic activity, in turn helping spur increased oil demand.