Investing.com — Oil prices jumped Tuesday, after Iran launched missiles against Israel triggering fresh concerns about disruptions to oil supplies in the oil-rich Middle East region.
At 2:30 p.m. ET (1830 GMT), the futures traded 2.4% higher to settle at $69.83 a barrel and the contract added 2.6% to $73.52 a barrel.
Iran launches strikes against Israel
Iran fired a dozens of ballistic missiles at Israel, targeting the latter’s military assets, sparking fresh fears of a wider Middle East conflict that many fear could disrupt oil supplies in the region. The attack against Israel was in retaliation for the Hezbollah leader, Hassan Nasrallah, Tehran said, though signaled that it wasn’t seeking to escalate tensions.
Tel Aviv said it would respond to the latest attack from Iran at a time and place of its choosing. Middle East tension had been ratcheting up in recent days as Israeli troops invaded Lebanon, in what Tel Aviv has described as “limited” ground offensive.
A serious escalation of the conflict could hit global supply given the importance of this oil-rich region, but “the market has become increasingly numb to the tension in the region given that, after almost a year of conflict, there has still been no impact on oil production,” said analysts at ING, in a note.
China’s economic woes weigh
The crude market struggled in September, mainly on concerns over the economic weakness in China, the world’s largest importer of oil.
Data released on Monday indicated that Chinese shrank sharply in September, a private sector survey showed on Monday.
Chinese authorities have announced a series of stimulus measures over the past week in an attempt to bring China’s 2024 growth back to around the targeted 5%, but the private sector survey suggests more still needs to be done.
Brent ended September down 9%, its third month of declines and largest monthly drop since November 2022. It also slumped 17% in the third quarter for its biggest quarterly loss in a year. WTI fell 7% last month and dropped 16% for the quarter.
OPEC+ set to meet this week
The members of OPEC and allies, a group widely known as OPEC+, will hold its Joint Ministerial Monitoring Committee meeting on Wednesday.
The group is scheduled to raise output by 180,000 barrels per day each month, starting in December, and thus little change is expected at this meeting.
Currently, OPEC+ is cutting output by 5.86 million bpd, or about 5.7% of global demand.
The industry group is set to reveal its weekly estimate of US crude oil and fuel stockpiles in the week to Sept. 27.
(Peter Nurse contributed to this story)