Oil prices rose in early Asian trade on Monday as Israel pushed deeper into Lebanon, reviving fears that the conflict in the Middle East could spread further and threaten supply routes already under strain.
West Texas Intermediate climbed to $89.88 a barrel, up 2.88%, while Brent advanced 2.43% to $93.33, according to market data cited by several outlets.
The latest jump followed reports that Israeli forces crossed the Litani River and declared areas south of the Zahrani...
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River a combat zone, before seizing Beaufort Castle in southern Lebanon. Prime Minister Benjamin Netanyahu then ordered the military to widen its campaign against Hezbollah, adding to concern that the fighting is becoming more entrenched rather than moving towards a settlement.
The escalation came only days after US-hosted discussions between Israeli and Lebanese officials in Washington were described by US officials as productive. Those hopes now appear to have faded, with traders treating the move deeper into Lebanon as a fresh geopolitical risk premium for crude.
The market is also still reacting to the wider standoff involving Iran. Iranian officials have said Lebanon will be central to any durable deal with Washington, while President Donald Trump said on Friday that his administration would soon make a final decision on whether to extend the existing ceasefire framework with Tehran. No timetable was given, and no agreement to reopen the Strait of Hormuz has been signed, despite repeated reports that an extension may be close.
For oil traders, the prospect of renewed disruption in the region has outweighed softer demand signals elsewhere. Data released over the weekend showed Chinese factory activity remained weak, underscoring concerns about sluggish exports and persistent deflationary pressure in the world’s second-largest economy.
Under more settled conditions, that sort of data would probably drag on crude. For now, however, supply fears in the Middle East are dominating price action.
Source: Noah Wire Services
