Oil Rises After Israeli Strikes and Call to Halt Libyan Exports - Yahoo Finance
Oil Rises After Israeli Strikes and Call to Halt Libyan Exports
(Bloomberg) -- Oil advanced after an Israeli strike on Hezbollah targets in southern Lebanon raised tensions in the Middle East and Libya’s eastern government said it will halt exports.
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Global benchmark Brent traded near $81 a barrel, while West Texas Intermediate climbed past $76. Israel sent more than 100 warplanes to take out thousands of Hezbollah missile launchers on Sunday, after which the militant group responded by firing more than 200 projectiles that did limited damage, according to Israeli officials.
Hezbollah, which is backed by Iran and designated a terrorist organization by the US, said it had concluded its military operation for the day, but that it will continue hostilities with Israel until the country agrees to a cease-fire in Gaza.
Officials in Lbya’s easten government called a halt to all oil production and exports as a political tussle over control of the country’s central bank deepened. The eastern government called a “force majeure” that applies to all fields, terminals and oil facilities, authorities said Monday in a statement on Facebook.
Libya had already been facing patchy production this month after outages as some fields.
Oil in the US is now almost 7% higher for the year, supported by the geopolitical risks, and a likely US interest-rate cut next month.
Federal Reserve Chair Jerome Powell gave his most decisive signal yet that his inflation-fighting mission has been accomplished, with a speech in Jackson Hole, Wyoming, on Friday. “The time has come for policy to adjust,” he said, cementing expectations for a rate cut next month.
Oil fundamentals have been relatively unperturbed by the flare-up in the Middle East, which provides about a third of the world’s crude. Volatility has remained below a peak at the start of the month, and options skews are still showing a bias toward puts — which profit from lower prices.
“While risks in the Middle East are building following the latest escalation, the market is becoming increasingly immune to these tensions,” said Warren Patterson, head of commodities strategy at ING Groep NV. “It has been going on for almost a year now and is yet to have an impact on oil supply.”
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