WionDrive News Desk 
The global oil market experienced an upward trend on Thursday, with prices continuing to rise following the assassination of a prominent Hamas leader in Iran. This event has heightened concerns about the potential for a broader conflict in the Middle East and its possible impact on oil supplies.
By 1124 GMT, the global benchmark Brent crude futures had increased by 71 cents, or 0.9 per cent, reaching USD 81.55 per barrel. Similarly, the U.S. West Texas Intermediate crude saw a gain of 72 cents, also 0.9 per cent, rising to USD 78.63. It’s worth noting that in the previous trading session, the most actively traded contracts for both benchmarks had surged by approximately 4 per cent.
The catalyst for this price movement was the killing of Hamas leader Ismail Haniyeh in Tehran, Iran’s capital, on Wednesday. This incident, coupled with Israel’s elimination of Hezbollah’s most senior military commander in Beirut less than 24 hours earlier, has intensified worries that the ongoing 10-month conflict between Israel and Hamas in Gaza could escalate into a wider regional confrontation, potentially disrupting oil supplies from the area.
Vivek Dhar, an analyst at the Commonwealth Bank of Australia, commented on the situation, stating, “Oil markets are understandably concerned that Haniyeh’s assassination may draw Iran more directly into the war with Israel. This development could put Iran’s oil supply and related infrastructure at risk.”
Dhar further noted that markets would be particularly anxious about Iran’s capacity to escalate tensions through its control of the strategically important Strait of Hormuz.
Adding to the upward pressure on oil prices was data released by the U.S. Energy Information Administration (EIA) on Wednesday. The report showed that robust export demand had led to a reduction in U.S. crude oil inventories by 3.4 million barrels for the week ending July 26.
Currency markets also played a role in the oil price dynamics. The U.S. dollar index extended its losses from the previous session following the Federal Reserve’s decision to maintain interest rates while leaving the possibility of a rate cut in September open. A weaker dollar can stimulate oil demand from investors holding other currencies.
In related monetary policy news, the Bank of England reduced interest rates from a 16-year high on Thursday, following a closely contested vote among policymakers who were divided on whether inflationary pressures had sufficiently eased.
Meanwhile, OPEC+ ministers were scheduled to meet on Thursday to determine output policy. Sources suggested that they were unlikely to make any changes to existing production cuts and would likely begin unwinding some of these reductions from October, despite recent declines in oil prices.
However, looking at the longer-term outlook, investors remain cautious about Chinese demand. Phillip Nova analyst Priyanka Sachdeva noted that this ongoing concern would continue to limit the potential upside in oil prices.
Recent economic data from China has contributed to these concerns. Official figures released on Wednesday indicated that manufacturing activity in the country had fallen to a five-month low in July, with factories struggling with declining new orders and low prices. Furthermore, a private sector survey published on Thursday revealed that China’s manufacturing activity in July had contracted for the first time in nine months due to a decrease in new orders.
These complex and interconnected factors – geopolitical tensions, supply and demand dynamics, monetary policy decisions, and economic indicators – continue to shape the global oil market, creating a volatile and uncertain environment for traders and investors alike.
