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Oil Gains on Expectations for Higher Demand and as Middle East Concerns Rise

File photo: An oil pumpjack in a field on March 24, 2024 in Grandfalls, Texas. Brandon Bell/Getty Images/AFP
File photo: An oil pumpjack in a field on March 24, 2024 in Grandfalls, Texas. Brandon Bell/Getty Images/AFP
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Oil Gains on Expectations for Higher Demand and as Middle East Concerns Rise

File photo: An oil pumpjack in a field on March 24, 2024 in Grandfalls, Texas. Brandon Bell/Getty Images/AFP
File photo: An oil pumpjack in a field on March 24, 2024 in Grandfalls, Texas. Brandon Bell/Getty Images/AFP

Oil prices rose on Tuesday, underpinned by signs that demand may improve China and the US, the world's biggest oil consuming nations, and growing concerns of a widening conflict in the Middle East that could affect supply from the region.
Brent futures for June delivery rose 41 cents to $87.83 a barrel by 0440 GMT. US West Texas Intermediate (WTI) crude futures for May rose 41 cents to $84.12 a barrel, after reaching its highest close since Oct. 27 in the previous session.
"The bullish catalysts for oil prices continue to pile up, with stronger-than-expected economic conditions in China and the US offering a more optimistic demand outlook, while geopolitical tensions in the Middle East continue to heat up with the involvement of Iran," said IG market strategist Yeap Jun Rong in an email.
Manufacturing activity in March in China expanded for the first time in six months and in the US for the first time in 1-1/2 years, which should translate to rising oil demand this year. China is the world's largest crude importer and second-largest consumer while the US is the biggest consumer.
In the Middle East, an Israeli strike on Iran's embassy in Syria killed seven military advisors, among them three senior commanders, marking an escalation in the war in Gaza between Israel and Hamas, which is supported by Iran. A widening of the conflict that has stretched for nearly half a year to include Israel directly fighting Iran has sparked concerns about impacts on oil supply.
"To date, the market hasn't been worried about supply disruptions, with the war remaining contained. Iran’s involvement could see its oil supply under threat," ANZ analysts wrote in a note.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, will hold an online meeting of its Joint Ministerial Monitoring Committee on Wednesday to review the market and members' implementation of output cuts.

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Washington Urges Israel to Extend Cooperation with Palestinian Banks

A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)
A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)
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Washington Urges Israel to Extend Cooperation with Palestinian Banks

A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)
A West Bank Jewish settlement is seen in the background, while a protestor waves a Palestinian flag during a protest against Israel's separation barrier in the West Bank village of Bilin in 2012. (AP)

The United States on Thursday called on Israel to extend its cooperation with Palestinian banks for another year, to avoid blocking vital transactions in the occupied West Bank.

"I am glad that Israel has allowed its banks to continue cooperating with Palestinian banks, but I remain convinced that a one-year extension of the waiver to facilitate this cooperation is needed," US Treasury Secretary Janet Yellen said Thursday, on the sidelines of a meeting of G20 finance ministers in Rio de Janeiro.

In May, Israeli Finance Minister Bezalel Smotrich threatened to cut off a vital banking channel between Israel and the West Bank in response to three European countries recognizing the State of Palestine.

On June 30, however, Smotrich extended a waiver that allows cooperation between Israel's banking system and Palestinian banks in the occupied West Bank for four months, according to Israeli media, according to AFP.

The Times of Israel newspaper reported that the decision on the waiver was made at a cabinet meeting in a "move that saw Israel legalize several West Bank settlement outposts."

The waiver was due to expire at the end of June, and the extension permitted Israeli banks to process payments for salaries and services to the Palestinian Authority in shekels, averting a blow to a Palestinian economy already devastated by the war in Gaza.

The Israeli threat raised serious concerns in the United States, which said at the time it feared "a humanitarian crisis" if banking ties were cut.

According to Washington, these banking channels are key to nearly $8 billion of imports from Israel to the West Bank, including electricity, water, fuel and food.