Oil prices rise for fifth session amid Middle East tensions, positive US economic data; Brent crude at $80/bbl

Oil prices climbed for the fifth straight session on Monday, building on last week's gains of over 3%, as easing U.S. recession concerns and supply risks in the Middle East bolstered the market.

Brent crude futures increased by 88 cents, or 1.1%, to $80.54 per barrel by 1319 GMT, while U.S. West Texas Intermediate crude futures rose $1.06, or 1.38%, to $77.90.

“Crude oil experienced significant price volatility last week, recovering from a seven-month low following four consecutive weeks of decline. Prices rebounded, supported by a decrease in U.S. jobless claims and a recovery in global equity markets. U.S. crude oil inventories also fell for the sixth consecutive week, further bolstering prices. However, gains were limited by a decline in Chinese oil imports, which reached their lowest levels since September 2022 due to sluggish manufacturing and industrial activity. The dollar index and U.S. bond yields remained steady amid profit-taking in the Japanese Yen, capping crude oil gains. We expect crude oil prices to remain volatile in today’s session,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

What's weighing on crude oil price?

Last week, Brent increased by 3.7% and WTI surged by 4.5%, supported by positive economic data and rising expectations of a potential U.S. interest rate cut. Three U.S. central bankers indicated that inflation may be cooling sufficiently for the Federal Reserve to reduce rates as early as next month.

In July, China's consumer prices rose faster than anticipated, while U.S. weekly jobless claims fell more than expected.

On Monday, Russia began evacuating civilians from parts of a second region near Ukraine, following Kyiv's escalation of military activity near the border. This came just days after the largest incursion into Russian territory since the war began in 2022.

OPEC has lowered its forecast for global oil demand growth in 2024, citing weaker-than-expected data from the first half of the year and more subdued expectations for China. This move weakens price support, and OPEC has also reduced its overall expectations for next year.