Oil prices extend gains on Israel-Hamas fears, OPEC+ awaited
2024.07.31 23:48
Investing.com– Oil prices rose in Asian trade on Thursday, extending a sharp rebound from the prior session as the killing of Hamas’ leader in Iran kept fears of a bigger Middle East war largely in play.
Focus was also squarely on a meeting of the Organization of Petroleum Exporting Countries and allies (OPEC+), for more cues on the cartel’s plans for production.
Oil benefited from data showing U.S. inventories shrank more than expected for a fifth consecutive week, as fuel demand remained strong with the travel-heavy summer season.
expiring in October rose 0.5% to $81.24 a barrel, while rose 0.6% to $77.30 a barrely by 22:51 ET (02:51 GMT).
Israel-Hamas fears in focus after Haniyeh killing
Traders attached a bigger risk premium to crude amid concerns over retaliation by Hamas against Israel for the killing of its leader Ismail Haniyeh in Tehran on Wednesday.
Israel made no claim on responsibility for the attack, but it was widely assumed that Jerusalem had carried out the strike.
The killing ramped up concerns over a bigger war in the Middle East, especially with Hamas’ potential retaliation and heightened tensions with Iran, given that the attack happened in its capital.
Israel continued its offensive in Gaza, and also traded missile strikes with Iran-backed Lebanese group Hezbollah this week.
The heightened tensions fueled fears that a bigger war in the Middle East will disrupt oil supply from the region, potentially tightening global markets.
OPEC+ committee set to meet, few changes expected
The Joint Ministerial Monitoring Committee of the OPEC+ is set to hold an online meeting later on Thursday.
Media reports coming before the meeting flagged no changes to the cartel’s production, despite a recent rout in oil prices that took them to near two-month lows.
But top producers Saudi Arabia and Russia are expected to further downplay plans to begin scaling back production cuts.
China concerns limit oil rebound
Bigger gains in oil prices were held back by persistent concerns over an economic recovery in top importer China, especially after a raft of weak purchasing managers index readings this week.
data showed an unexpected contraction in China’s manufacturing sector, coming in line with a reading from Wednesday.
The readings ramped up calls for more stimulus measures from Beijing, who has so far provided few actual details on plans to support the economy.
