Oil prices mixed on Monday amid ongoing conflicts in the Middle East and the expectation that increased economic activity in the world's largest oil-consuming countries, the US and China, will boost oil demand, while possibility of Saudi Arabia increasing oil production from December limited further price hikes.
International benchmark Brent crude increased by 0.02% to $71.95 per barrel at 10.40 a.m. local time (0740 GMT), up from the previous session's close of $71.93.
US benchmark West Texas Intermediate (WTI) fell by 0.16% to $68.32 per barrel after closing at $68.43 in the prior session.
Israeli airstrikes continue in several areas of southern and eastern Lebanon.
The Israeli army, which has been engaged in controlled clashes with Hezbollah since Oct. 8, 2023, conducted hundreds of airstrikes on southern Lebanese cities, as well as the Bekaa and Baalbek regions, on Sept. 23.
According to Lebanese authorities, a total of 1,174 people, including 104 children and 194 women, have been killed since Sept. 17, when communication devices used by Hezbollah were destroyed.
Lebanon's Hezbollah emphasizes that the conflict in the region will end only if Israel's attacks on Gaza stop.
Meanwhile, analysts expect the employment-weighted data week to give clues about the US Federal Reserve's (Fed) next steps and give more information about the course of the US economy.
The lower-than-expected inflation indicators in the US raised expectations that the Fed may now focus on supporting the labor market and continuing to cut interest rates.
While the expectation that the Fed will cut by 75 basis points by the end of the year remains strong, the expectations for a 50 basis point cut by the Fed in November recorded as 54%.
Interest rate cuts are expected to boost economic activity and oil demand.
The expectation that the steps taken by China to increase economic mobility will positively affect the oil demand in the country supports the increase in prices.
Moreover, while the economic incentives announced by the government last week in China continue to reflect positively on the markets, the government has made statements that banks will reduce mortgage interest rates to solve the current problems in the housing sector.
On the other hand, expectations that Saudi Arabia, the largest producer in the Organization of the Petroleum Exporting Countries (OPEC), will ramp up output from December in a bid to reclaim market share capped giants.
In June, the OPEC+ group, which includes OPEC members and other major producers like Russia, agreed to extend additional voluntary cuts of 2.2 million barrels per day until the end of September, with a gradual phase-out planned until September 2025.
Though, the country's policy seems to have changed towards a supply hike as output surge from non-OPEC producers and weaker global demand offset the group's efforts to keep prices higher.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr