Oil price rises on Middle East worries, ear rates fall By Investing.com

Investing.com– Oil prices rose in Asian trade on Monday as heightened tensions in the Middle East prompted traders to place a higher risk premium, while the prospect of lower interest rates boosted hopes that demand it will improve.

Crude oil prices were on a two-week rebound from near three-year lows as supply disruptions from Hurricane Francine also pointed to tighter markets.

U.S. crude for November delivery rose 0.5 percent to $74.83 a barrel, while it rose 0.4 percent to $70.41 a barrel by 9:30 p.m. ET (01: 30 GMT).

Fed rate cut boosts oil, more economic guidance expected

Oil prices rose after the Federal Reserve cut interest rates sharply last week and signaled the start of an easing cycle.

The move raised hopes that lower rates will boost economic growth in the coming months, helping in turn to boost demand for crude oil.

More Fed cues are coming this week, with a string of officials – mostly – set to speak in the coming days. The Fed’s preferred inflation gauge – data – will also be available on Friday.

Beyond the Fed, and they will meet this week, both banks are likely to cut interest rates.

Middle East tensions remain in play

Traders were seen placing a risk premium on oil prices amid few signs of easing tensions in the Middle East.

Israel continued to carry out strikes in Gaza and Lebanon, largely maintaining concerns about an all-out war in the region. Hezbollah recently vowed retaliation against Israel after the country allegedly detonated several electronic devices used by the Lebanese group.

Constant fighting and threats of war have raised concerns that a wider conflict in the Middle East will disrupt supplies to the oil-rich region, tightening global markets.