Investing.com-- Oil prices rose slightly in Asian trade on Monday as heightened tensions in the Middle East kept some concerns over supply disruptions in play, although gains were limited by fears of slowing economic growth.
Crude prices had plummeted to eight-month lows last week after a string of weak U.S. economic readings ramped up concerns that the world’s biggest economy was headed for a recession. Increased tensions in the Middle East- amid heightened concerns over Hamas’ retaliation against Israel for the killing of its leader- offered little support to oil.
Brent oil futures expiring in October rose 0.1% to $76.93 a barrel, while West Texas Intermediate crude futures rose 0.1% to $76.39 a barrel by 21:12 ET (01:12 GMT).
Oil battered by mounting demand fears
Crude was nursing steep losses from last week, following a string of weak U.S. economic readings. While the data did push up expectations for interest rate cuts by the Federal Reserve, it also raised the question that the Fed may be too late in cutting rates now to offset an economic downturn.
The prospect of a recession in the world’s biggest fuel consumer bodes poorly for future demand, even as recent inventory data showed that increased travel demand during the summer season had kept fuel consumption high.
Weak economic signals from China were also a major pain point in recent weeks, as dismal data from the world’s biggest oil importer pushed up concerns over slowing demand.
Israel-Hamas fears remain in play
Concerns over a conflict in the Middle East- which could disrupt oil supplies from the crude-rich region- remained in play, as Israel kept up its offensive in Gaza.
Israel had also seemingly killed several high-profile leaders of Hamas and Hezbollah last week- drawing ire from the groups and raising the threat of an all-out war in the region.
This notion had kept traders attaching some element of risk premium to oil prices, although it still did little to deter oil’s sharp decline in recent weeks.
Peace talks between Israel and Hamas appeared to have yielded little progress towards a ceasefire, even as the U.S. called for a deescalation.