Oil prices rose nearly 1% on Thursday, reversing some of the previous session’s losses. Markets jittery ahead of Middle East tensions, fourth-quarter distillate demand expectations, and U.S. presidential election
Brent crude futures rose 77 cents, or 1%, to $75.73 a barrel by 06:55 GMT, while WTI crude futures rose 82 cents, or 1.2%, to $71.59 a barrel as intensified fighting between Israel and Hezbollah raised supply concerns.
Oil prices have risen nearly 4% so far this week, helping to pare losses of more than 7% last week.
Oil markets are struggling to recover from a sell-off last week when concerns about weak demand and oversupply may have overreacted to prices. The Middle East conflict essentially unchanged.
Israel launched attacks on the Syrian capital Damascus early Thursday. This follows Israeli attacks on the southern suburbs of Beirut a day earlier and Hezbollah’s first reported firing of precision-guided missiles at Israeli targets.
The escalating fighting comes as Washington makes its last major push for peace between Israel and the Iranian-backed groups Hezbollah and Hamas ahead of a November 5 presidential election that could change U.S. policy in the Middle East.
More wild market swings are likely in the critical period leading up to the election, which will be followed immediately by the Federal Reserve’s interest rate decision in November.
Some analysts expect Trump’s victory to weigh on oil prices if he pursues policies that could add to the already abundant supply in the market.
The potential price increase could be limited by the U.S. presidential election, in which Trump has overtaken Kamala Harris, according to recent market data, and Trump has proposed making the U.S. a major oil supplier.
While betting markets show Trump ahead, other polls currently suggest the outcome is too close to call.
On the oil demand front, support has come from strong demand for distillates, a view that highlights strong travel demand in Asia and continued declines in distillate inventories in several major markets. There is a possibility that distillate demand in the fourth quarter could exceed expectations.
