Oil prices rise nearly 2%, recovers some of last week's 7% decline

Oil prices rise: Oil prices settled nearly 2 per cent higher on Monday, recouping some of last week's more than 7 per cent decline, with no letup of fighting in Middle East and expected Israeli retaliation on Iran worrying markets about supply from region.

Brent crude futures were up $1.23, or 1.68 per cent, at $74.29 a barrel, while US West Texas Intermediate crude futures were $1.34, or 1.94 per cent higher, at $70.56 a barrel.

Brent settled more than 7 per cent lower last week, while WTI lost around 8 per cent. Those were contracts' biggest weekly declines since Sept. 2, due to slowing economic growth in China and falling risk premiums in Middle East.

Israeli forces besieged hospitals and shelters for displaced people in norrn Gaza Strip on Monday, medics said, as y stepped up operations against Palestinian militants. Israel also carried out targeted strikes on sites belonging to Hezbollah's financial arm in Lebanon.

US Secretary of State Antony Blinken will make anor push for a ceasefire when he hes to Middle East on Monday, State Department said, seeking to kick-start negotiations to end Gaza war and also defuse spillover conflict in Lebanon.

US envoy Amos Hochstein will hold talks with Lebanese officials in Beirut on Monday on conditions for a ceasefire between Israel and Hezbollah, two sources told Reuters.

"Crude futures getting a lift this morning as escalated fighting continues in Middle East... Israel is also preparing for more retaliatory attacks likely into Iran," said Dennis Kissler, senior vice president of tring at BOK Financial.

" sell-off in crude over past two weeks was mostly on long liquidation as crude market continues to search for an equilibrium between slowing demand and continued unrest in Middle East," he ded.

China cut benchmark lending rates as anticipated on Monday, part of a broer package of stimulus measures to revive economy.

Data on Friday showed China's economy grew at slowest pace since early 2023 in third quarter, fuelling growing concerns about oil demand.

China's oil demand growth is expected to remain weak in 2025 despite recent stimulus measures from Beijing as world's No. 2 economy electrifies its car fleet and grows at a slower pace, he of International Energy Agency said on Monday.

Saudi Aramco's CEO told an energy conference in Singapore on Monday that he was still "fairly bullish" on China's oil demand in light of stepped-up policy support aimed at boosting growth, and on rising demand for jet fuel and liquid-to-chemicals.

Meanwhile, Minneapolis Federal Reserve Bank President Neel Kashkari on Monday repeated that he expects "modest" interest-rate cuts over coming quarters, though a sharp weakening of labour markets could move him to vocate for faster rate cuts.

Lower interest rates cut cost of borrowing, which can spur economic activity and boost demand for oil.

US Energy Information ministration said last week that weekly oilfield production rose by 100,000 barrels per day to a record 13.5 million bpd during week ended Oct. 11.

US crude oil stockpiles likely rose by about 100,000 barrels last week, while distillate and gasoline inventories were seen down, a preliminary Reuters poll showed on Monday.