Oil near two-month high on positive demand outlook amid busy travel season

- Longstanding Israeli-Palestinian conflict continues to raise geopolitical risks in Middle East

Oil prices continued to linger near two-month highs with positive demand outlook amid expectation of a busy travel season during summer months.

International benchmark Brent crude traded at $86.83 per barrel at 09.33 a.m. local time (0633 GMT), an increase of 0.27% from the closing price of $86.60 per barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $83.53 per barrel at the same time, a 0.18% rise from the previous session that closed at $83.38 per barrel.

Demand for fuel is expected to increase as the travel-heavy summer vacation season begins.

If official data from the Energy Information Administration (EIA) due on Wednesday reveals a reduction in the amount of gasoline and oil stockpiles, prices are predicted to gain further upward support.

The US, the world's biggest oil consumer, will kick off travel season with Independence Day holiday on July 4. Forecast from the American Automobile Association showed that overall travel during the holiday period will be 5.2% higher than in 2023, with car travel increasing by 4.8% from last year.

Meanwhile, the longstanding Israeli-Palestinian conflict is continuing to raise geopolitical risks in the Middle East.

Israel is continuing its relentless onslaught on the besieged Gaza Strip. Latest data by the Health Ministry revealed that overall death toll reached 37,900 since last Oct. 7.

The Israeli army ordered Palestinians living in eastern areas to immediately leave ahead of a possible new ground assault in Khan Yunis, Gaza on early Tueaday. Yemen's Houthi group announced Monday that they carried out military operations targeting four ships in the Red, Arabian and Mediterranean Seas and Indian Ocean in solidarity with Palestinians in Gaza.

Tension is also high in the region amid ongoing conflict between Israel and Hezbollah. Lebanese Foreign Minister Abdullah Bou Habib urged countries on Friday to show solidarity with Lebanon in the face of Israeli threats to launch a war.

By Zeynep Beyza Kilic

Anadolu Agency

energy@aa.com.tr