Oil prices rose by about 1% on Monday after falling by more than 7% last week amid concerns about the prospects for oil demand in China and lower risk premiums in the Middle East.
Today's price recovery was triggered by the news that the Central Bank of China will cut benchmark lending rates as part of a broader stimulus package to revive the economy. Recall that China is the world's largest importer of oil.
The situation in the Middle East was also in the focus. Hundreds of Beirut residents fled their homes late Sunday, with multiple explosions heard, as Israel prepared to attack sites linked to the financial operations of the Hezbollah group. Today, U.S. envoy Amos Hochstein will hold talks with Lebanese officials in Beirut on conditions for a cease-fire between Israel and Hezbollah.
Meanwhile, data provided on Friday by the U.S. Energy Information Administration showed that in the week to October 11, weekly production at oil fields increased by 100,000 barrels per day, reaching a record 13.5 million barrels per day.
Overall, crude has had a volatile month as traders compared risks to oil supplies from the Middle East and signs of weak demand in China. At the same time, the International Energy Agency said that rising global supplies could lead to a glut next year as OPEC+ set to restore some shuttered capacity in stages from December.