Oil prices rise on heightened ME tensions

Oil prices climbed slightly on Thursday, extending gains from the previous day. This increase reflects investor concerns about a potential escalation in the Middle East crisis, particularly involving Iran, a major oil producer, Reuters reported on Thursday.

Brent crude oil futures rose slightly, while U.S. West Texas Intermediate crude also saw a small increase. These gains come after news that airstrikes in Gaza killed the sons of a Hamas leader, raising fears that peace talks might collapse. Negotiations between Israel and Hamas haven’t yielded any breakthroughs yet.

Analysts believe oil prices remain sensitive to geopolitical events in the region. Investors are factoring in the risk of supply disruptions if tensions continue to rise.

However, this upward pressure on oil prices is balanced by other economic factors. Rising interest rates in the U.S., as signaled by the Federal Reserve, could slow economic growth and reduce demand for oil. Recent inflation data suggests the Fed might maintain high interest rates for longer than initially expected, potentially dampening oil demand.