Oil prices stabilise after Golan Heights attack

By Robert Harvey

LONDON (Reuters) -Oil prices were stable on Monday as fears of a widening conflict in the Middle East after a rocket strike in the Israeli-occupied Golan Heights put a floor under last week's price losses.

Brent crude futures gained 7 cents, or 0.09%, to $81.20 a barrel at 1007 GMT. U.S. West Texas Intermediate (WTI) crude futures rose by 1 cent, or 0.01%, to $77.17.

The Brent and WTI benchmarks lost 1.8% and 3.7% respectively last week on sagging Chinese demand and hopes of a Gaza ceasefire agreement.

"A rather muted opening greets oil prices after Middle East tension is back on the menu due to a reported Hezbollah attack," said PVM analyst John Evans, referring to the strike on Golan Heights.

On Sunday Israel's security cabinet authorised Prime Minister Benjamin Netanyahu's government to decide on the "manner and timing" of a response to the attack that killed 12 teenagers and children.

Israel vowed retaliation in Lebanon against Iran-backed Hezbollah, which denied responsibility for the attack. Israeli jets hit targets in southern Lebanon on Sunday.

The tensions have spread to several fronts and are in danger of spilling into a wider regional conflict, sparking investor concerns about the potential impact on crude output from the world's largest oil-producing region.

"Worries over escalating tensions in the Middle East prompted fresh buying, but gains were limited by lingering concerns of weakening demand in China," said Fujitomi Securities analyst Toshitaka Tazawa.

Data released this month showed that China's total fuel oil imports dropped 11% in the first half of 2024, raising concerns about the wider demand outlook in the world's biggest crude importer.

Prices also moved lower on Friday on news that the huge Dangote oil refinery in Nigeria is reselling cargoes of U.S. and Nigerian crude after technical problems at the refinery.

Meanwhile, markets are keeping a watch on oil producer Venezuela after the country's electoral authority said that President Nicolas Maduro had won a third term with 51% of the vote despite multiple exit polls pointing to an opposition win.



U.S. Secretary of State Antony Blinken said that the United States has serious concerns that the results do not reflect the votes of the people.

The U.S. had previously said it would "calibrate" its sanctions policy towards Venezuela depending on how the election unfolds in the OPEC member nation.

Source: Investing.com