Brent crude futures jumped 56 cents, or 0.7%, to $79.58 a barrel, while U.S. crude futures were at $75.40 a barrel, up 57 cents, or 0.75%
Oil prices extended gains on Monday on fears a major spillover in fighting in the Middle East could disrupt oil supplies, while approaching U.S. interest rate cuts lifted the economic and fuel demand outlook.
Brent crude futures jumped 56 cents, or 0.7%, to $79.58 a barrel by 0615 GMT, while U.S. crude futures were at $75.40 a barrel, up 57 cents, or 0.75%.
Geopolitical risk factors will likely influence the oil market significantly, according to Kelvin Wong, a senior market analyst at OANDA in Singapore.
Increased odds of a tit-for-tat retaliation attack in response to Israel’s strike may keep WTI (West Texas Intermediate) crude supported, he added.
Both oil benchmarks added more than 2% on Friday after U.S. Federal Reserve Chair Jerome Powell endorsed the start of interest rate reductions.
The prospect of easing monetary policy boosted sentiment across the commodity complex, ANZ analysts said in a note, adding it expects the Federal Reserve will implement a progressive series of rate reductions.
Still, oil prices were lower last week as a poor outlook for major economies weighed on fuel demand, the bank added.
Oil traders also remain cautious over the actions of the Organization of Petroleum Exporting Countries (OPEC) and its allies, or OPEC+, which has plans to raise output later this year, according to Priyanka Sachdeva, senior market analyst at Phillip Nova.
The cartel had recently cut its outlook for global oil demand, citing concerns over weak demand in top oil importer China, Sachdeva added.
Current robust U.S. demand and refilling of SPR reserve look as the only support for oil prices against the risk of excess OPEC supply, she added, referring to the U.S. Strategic Petroleum Reserve (SPR).
