Oil Extends Gains for Fifth Consecutive Session Amid Mideast Tensions and Supportive U.S. Data

Oil prices extended their upward momentum on Monday, marking a fifth consecutive session of gains, driven by easing U.S. recession fears and escalating geopolitical tensions in the Middle East. The market continued to build on last week’s strong performance, which saw more than a 3% rise in prices.

Brent crude futures edged up by 28 cents, or 0.4%, reaching $79.94 a barrel by 0635 GMT. Similarly, U.S. West Texas Intermediate (WTI) crude futures increased by 42 cents, or 0.6%, to $77.26 a barrel.

The rally in oil prices is being fueled by heightened geopolitical risks. Iran and Hezbollah have vowed retaliation following the assassinations of Hamas leader Ismail Haniyeh and Hezbollah military commander Fuad Shukr. The situation in the Middle East remains volatile, with Israel intensifying its incursion into Gaza. A recent airstrike on a school compound reportedly killed at least 90 people, though Israel disputes the death toll figures. In response, Hamas has expressed doubts about participating in new ceasefire talks.

Last week, Brent crude saw a 3.7% weekly gain, while WTI surged 4.5%, buoyed by positive economic data and increased expectations of a U.S. interest rate cut. The market was further supported by comments from three U.S. central bankers, who suggested that inflation was cooling enough to justify a potential rate cut as early as next month.

Adding to the optimistic economic outlook, China’s consumer prices rose faster than anticipated in July, and U.S. weekly jobless claims fell more than expected last week. These factors collectively contributed to the ongoing strength in oil prices.