Investing.com — Oil prices rose on Monday, driven by production cuts in Libya and new concerns about a broader escalation in the Middle East following an escalation in tensions between Israel and Hezbollah and dwindling hopes for a ceasefire in Gaza.
At 2:18 PM ET (18:18 GMT), October expiring prices rose 2.9% to $80.42 per barrel, while rising 3.5% to $77.50 per barrel.
The production cuts in Libya provide support
On Monday, Libya’s eastern government said it has halted crude oil exports and production due to a dispute with the country’s western government.
The disruption comes as fears of a supply glut persist ahead of a new wave of OPEC barrels, with the oil cartel expected to slowly start easing its production cuts later this year.
A Gaza ceasefire remains elusive in Cairo talks; renewed fears of a wider conflict in the Middle East
Media reports showed that talks between Hamas and Israel in Cairo this weekend failed to reach an agreement on a ceasefire, reducing the chances of a de-escalation of the 10-month war.
U.S. officials said the talks were constructive, although the apparent lack of an agreement undermined earlier optimistic comments from U.S. officials. However, talks will continue in the coming days.
The dwindling hopes for a ceasefire deal come as new concerns about a wider conflict in the Middle East rose after Hezbollah and Israel exchanged strikes this weekend. However, both sides have said they are not seeking war.
Lingering instability in the Middle East saw traders assign some risk premium to oil amid bets that a spillover from the conflict between Israel and Hamas could destabilize oil production in the oil-rich region.
(Ambar Warrick contributed to this story)
