By (Bloomberg) — Oil gained — after losing almost 8% last week — as traders tracked the risk to supplies from tensions in the Middle East and China again moved to bolster its the economy.
Most Read from Bloomberg
Global benchmark Brent rose above $74 a barrel, while West Texas Intermediate topped $70. On Saturday, a Hezbollah drone exploded next to Prime Minister Benjamin Netanyahu’s private home. The following day, Israel opened a fresh military assault on the group’s strongholds in Lebanon. Israel has already vowed to retaliate against Iran for a missile attack at the start of October.
Meanwhile, China — the world’s largest oil importer — cut its benchmark lending rates on Monday, after the central bank lowered interest rates at the end of September as part a series of measures to revive growth. Speaking in Singapore, Saudi Aramco Chief Executive Officer Amin H. Nasser said he is bullish about the nation’s consumption.
Crude has had a volatile month, with traders balancing risks to flows from the Middle East against signs of soft demand in China. At the same time, the International Energy Agency has said rising global supplies could lead to a surplus next year, with OPEC+ set to restore some shuttered capacity in stages from December.
“If we don’t see a major escalation of the situation in the Middle East, I still expect that oil prices will be further under pressure because we are entering a period, including next year, of more comfortable markets,” Fatih Birol, head of the IEA, told Bloomberg Television on Monday. He cited factors including the rapid growth of output in the Americas.
Still, traders remain on edge. Bullish call options continue to trade at a premium to bearish puts, while weekly call option volumes on the global Brent benchmark were the second-largest on record last week.
To get Bloomberg’s Energy Daily newsletter into your inbox, click here.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.
