Oil prices rebounded on Tuesday, recovering from recent losses as fears of an escalating conflict in the Middle East outweighed concerns about slowing economic growth dampening demand.
Brent crude oil futures for October delivery rose 1.3 percent to $77.29 per barrel, while West Texas Intermediate (WTI) crude futures increased 1.3 percent to $76.93 per barrel as of 22:44 ET (02:44 GMT).
Middle East tensions in focus
The oil price recovery was driven by worries over the potential for an escalation in the conflict between Israel and Hamas. The prospect of a ceasefire appeared to be fading, leading traders to price in a higher risk premium for crude oil.
Traders were monitoring the situation for any supply disruptions arising from the conflict, which could tighten oil markets. However, the Israel-Hamas war has so far caused minimal disruptions to global oil production.
Growth concerns remain a factor
Oil prices had suffered steep losses over the past month, hitting seven-month lows on concerns over slowing economic growth and weakening demand.
Moreover, disappointing U.S. labor market data added to these concerns, coming on the heels of poor manufacturing readings from China, the world’s largest oil importer. Further Chinese economic data, including trade figures for July, will be closely watched for indications of the country’s oil import trends and overall demand.
Upcoming Chinese inflation data may also provide insights into retail fuel demand in the world’s second-largest economy.
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