Oil up amid Middle East tension, US hurricane threatening fuel shortage

By Zeynep Beyza Kilic

Oil prices increased on Thursday with escalating conflict in the oil rich Middle East region and a surge in fuel demand in the US amid hurricane Milton which made landfall in Florida.

International benchmark Brent crude rose by 0.74% to $77.15 per barrel at 11.49 a.m. local time (0849 GMT), up from the previous session's close of $76.58.

US benchmark West Texas Intermediate (WTI) increased by 0.83% to $73.85 per barrel after closing at $73.24 in the prior session.

Concern that ongoing conflict between Israel, Hamas and Hezbollah in the Middle East may spread to a wider area and cause a disruption in oil supply supported price increase.

According to the Lebanese Civil Defense Directorate, 10 people, including 5 paramedics, lost their lives and 12 people were injured in two air strikes carried out by Israeli warplanes in the south of Lebanon on late Wednesday.

Many countries are evacuating their citizens in Lebanon due to the ongoing attacks.

Hezbollah said Thursday it targeted group of Israeli soldiers in vicinity of Al-Marj military site, Kiryat Shmona settlement with rocket salvos. The move comes after the Israeli army said Wednesday that it eliminated a member of Hezbollah's "Golan Network" in southwestern Syria in an airstrike.

Israel continues its attacks on Gaza despite international calls for a ceasefire. Seven Palestinians, including three children, were killed in new Israeli airstrikes in the southern Gaza Strip early Thursday, a medical source said.

The US, the world's biggest oil consumer, is grappling with consecutive hurricanes as the newest storm, named hurricane Milton, leaves more than 2 million residents without electricity in the state of Florida.

As locals were urged to evacuate the area under threat of massive destruction due to the storm, long lines formed in many gas stations in Florida.

The increase in fuel demand put many gas stations in danger of running out of gasoline which residents need to fill their vehicle tanks or use to power their generators.

Meanwhile, experts forecast a surge in oil demand following new incentives to stimulate the economy in China, the world's biggest oil importer.

The government is expected to announce more fiscal stimulus plans over the weekend to support the country's economy.