Oil prices rise amid violence in the Middle East

Oil prices rose more than 3% on Monday, as clashes between Israel and the Palestinian Islamic Resistance Movement (Hamas) raised fears of a broader conflict in the Middle East.

By 1143 GMT, Brent crude rose $2.70, or 2.2%, to $87.28 per barrel, while US West Texas Intermediate crude recorded $85.57 per barrel, up $2.78, or 3.4%.

According to Reuters, the two benchmarks rose more than $4 a barrel earlier in the session.

The rise in oil prices came to reverse the downward trend last week, which witnessed the largest weekly decline since March, as Brent fell 11% and West Texas Intermediate crude fell more than eight percent amid concerns about rising interest rates and their impact on global demand.

On Saturday, the Palestinian Islamic Resistance Movement (Hamas) launched the largest military attack on Israel in decades, killing hundreds of Israelis. In response, Israel carried out a wave of retaliatory air strikes on Gaza, killing hundreds of people.

“Increasing geopolitical risks in the Middle East should support oil prices… and more volatility can be expected,” analysts from ANZ Bank said in a note to clients.

“For this conflict to have a lasting and meaningful impact on oil markets, there must be a sustained reduction in oil supply or transport,” Vivek Dhar, an analyst at the Commonwealth Bank of Australia, said in a note.