Oil prices rise amid ongoing Middle East tensions, cease-fire talks

(WO) — Oil prices persevered as traders tracked tensions between Israel and Iran, with strikes continuing amid U.S. efforts to facilitate a cease-fire agreement.

West Texas Intermediate (WTI) rose more than 1% to trade near $72 a barrel, reversing earlier losses. Global benchmark Brent climbed above $75 a barrel.

The conflict in the Middle East has continued even as U.S. Secretary of State Antony Blinken is scheduled to meet with leaders in another attempt to engineer a cease-fire — possibly the Biden administration’s last chance to secure a deal before the U.S. presidential election. Lebanon’s Health Ministry said an Israeli strike near one of the capital’s main government-run health facilities killed 13 people, including a child, and wounded 57 others. 

Crude has been buffeted this month — with Brent swinging in a range of more than $11 — as the war in the Middle East raises the potential for disruptions to supplies. At the same time, top importer China has moved to support growth with stimulus, but investors remain wary that the global oil market may swing to a surplus in the coming quarters.

“Assuming no supply disruptions in the Middle East, the oil balance looks increasingly comfortable through 2025,” ING analysts Ewa Manthey and Warren Patterson wrote in a note. “With the market returning to a sizable surplus, we should at least see the front end of the curve moving into contango,” they said, referring to the market structure which indicates oversupply.