The price of oil rose by about 0.6% after falling by more than 4% yesterday due to a possible ceasefire between Hezbollah and Israel.
Yesterday's sell-off followed a rally that began after Iran fired rockets at Israel on October 1. Last week, prices rose by 8%, recording the largest increase in more than a year.
Today's price recovery is linked to a potential Israeli attack on Iran's oil infrastructure, as well as expectations of a government meeting on China's fiscal policy. China's finance ministry will detail plans for fiscal stimulus at a long-awaited press conference on Saturday, the government's main information office said. Stimulus measures could help China's flagging economy, which in turn could boost demand for oil. Experts expect oil to trade in the range of $73.15-$78.30 in the short term, pending announcements of new Chinese fiscal stimulus measures, while investors will also monitor developments in the Middle East.
As for demand, data from the American Petroleum Institute showed that U.S. crude oil inventories rose by almost 11 million barrels last week, much more than analysts expected. However, fuel stockpiles fell. Official data from the Energy Information Administration will be released later today (at 14:30 GMT). Economists expect oil inventories to rise by 1.9 million barrels.