WTI crude oil futures rose to around $75.4 per barrel on Monday, rising for the third straight session, driven by concerns over supply risks amid escalating fears of a broader conflict in the Middle East. Over the weekend, Israel and Hezbollah exchanged a barrage of missiles, with Hezbollah launching hundreds of rockets and drones against Israel in retaliation for the assassination of a senior commander in Beirut last month. In anticipation of the attacks, Israeli jets struck targets in Lebanon shortly beforehand. Simultaneously, expectations of less restrictive monetary policy boosted sentiment in the commodities market. Last week, Federal Reserve Chair Jerome Powell suggested that the Fed is ready to cut interest rates, citing concerns about job market weakness and confidence that inflation is approaching the 2% target. Still, there are lingering concerns about slowing energy demand due to weak data from top markets.
Heating oil futures in the US rose to $2.30 per gallon, rebounding from the December 2021 low of $2.26 recorded on August 19th, as oil prices increased following the latest EIA report, which revealed sharper-than-expected constraints in US supply for crude oil and distillate fuel. Crude oil inventories experienced a draw of 4.649 million barrels for the week ending August 16th, nearly double the anticipated decrease, while distillate stocks unexpectedly saw a draw of 3.312 million barrels instead of the expected marginal build. These results compounded concerns over ongoing supply disruptions in the Middle East. However, heating oil stockpiles offset last week's reduction by adding 265 thousand barrels, which limited gains for the heating commodity.
