Oil prices rose by more than 2% due to China's monetary stimulus and concerns over tensions in the Middle East affecting supply, alongside an approaching hurricane in the U.S.
Price increases followed China's decision to lower key lending rates, which aims to combat an economic slowdown. This move could reduce downside risks for crude oil prices. However, weak internal demand and insufficient fiscal policies might hinder a sustainable rally in oil prices.
China's central bank announced its most significant stimulus since the pandemic to boost the economy, but analysts stressed that further fiscal support is essential for achieving growth targets. This stimulus follows disappointing economic data that raised concerns about a prolonged slowdown.
In the Middle East, Israeli airstrikes against Hezbollah targets resulted in significant casualties and heightened tensions, prompting concerns about potential impacts on oil production from the region.
Traders are also monitoring a hurricane threatening the U.S. Gulf Coast, prompting evacuations and production pauses by oil companies in the region.