(Bloomberg) — Oil gained — after losing nearly 8% last week — as traders monitored supply risks from tensions in the Middle East and China took renewed action to shore up its economy.
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Global benchmark Brent rose nearly $74 a barrel, while West Texas Intermediate traded at $70. On Saturday, a Hezbollah drone exploded next to Prime Minister Benjamin Netanyahu’s private home. The next day, Israel opened a new military assault on the group’s strongholds in Lebanon. Israel has already vowed to take revenge on Iran for a rocket attack in early October.
Meanwhile, China – the world’s biggest oil importer – cut its key interest rates on Monday after the central bank cut rates in late September as part of a series of measures to revive growth. Speaking in Singapore, Saudi Aramco CEO Amin H. Nasser said he is optimistic about the country’s consumption.
Crude oil has had a volatile month, with traders weighing risks to Middle Eastern flows against signs of weak demand in China. At the same time, the International Energy Agency has said rising global supply could lead to a surplus next year, with OPEC+ restoring some shuttered capacity in phases from December.
“If we do not see a major escalation of the situation in the Middle East, I still expect oil prices to come under further pressure as we enter a period of more comfortable markets, also next year,” said Fatih Birol, head of the company. of the IEA, Bloomberg Television told Monday. He cited factors such as the rapid growth of manufacturing in America.
Still, traders remain tense. Bullish call options remain more expensive than bearish puts, while weekly call option volumes on the global Brent benchmark were the second largest on record last week.
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