(New York) Oil prices climbed to their highest in just over two months on Monday, driven by escalating tensions in the Middle East, the start of hurricane season and expectations of stronger fuel demand ahead of the holiday season.
The price of a barrel of North Sea Brent crude for delivery in September, which is the first day of use as a reference contract, gained 1.88% to 86.60 dollars.
Its American equivalent, the barrel of West Texas Intermediate (WTI), for delivery in August, rose by 2.25% to 83.38 dollars.
Oil is “driven by escalating tensions between Israel and Hezbollah and a strong Chinese manufacturing PMI,” DNB analysts summarized.
Nearly nine months into the war, which began with an unprecedented Hamas attack on Israel on October 7, Israel struck the southern Gaza Strip on Monday after Palestinian fighters fired 20 rockets into its territory.
This war also raises fears of a conflict between Israel and the Lebanese Hezbollah after an increase in attacks on both sides of the Israeli-Lebanese border.
An extension of the conflict “is not necessarily what’s going to happen, but it’s getting closer every day,” worried Robert Yawger of Mizuho USA.
Another factor in the price increase is that the hurricane season in the United States and the Caribbean has started early and strong, which continues to raise concerns about a possible impact on production and refining equipment in the Gulf of Mexico, which has not been affected for now.
The Hurricane Beryl hit the Caribbean island of Grenada on Monday with “devastating” winds of up to 240 km/h, the US National Hurricane Center (NHC) warned.
“This is the first time we’ve had a Category 4 hurricane this early in the season,” Yawger said.
“This monster storm at the end of June paints a worrying picture for the rest of the season,” added the analyst, which invites investors to bet on a rise in the price of black gold.
Finally, the rise in crude oil prices was driven by that of gasoline on the eve of a week of vacation departures in the United States. The markets will be closed on Thursday, July 4, the national holiday.