Askume SINGAPORE, Sept 23 – Oil prices rose in early trade on Monday on concerns that supply at key producing regions would be hit by conflicts in the Middle East and hopes that last week’s U.S. interest rate cut would support demand.
November Brent crude futures were up 20 cents, or 0.3%, at $74.69 a barrel by 0045 GMT. U.S. crude futures for November rose 22 cents, or 0.3%, to $71.22.
Both contracts had risen in the previous session, supported by US interest rate cuts and lower US supplies following Hurricane Francine. Oil prices rose for a second consecutive week last week.
Last Wednesday, the Federal Reserve cut interest rates by half a percentage point , lowering borrowing costs far more than many expected.
Rate cuts typically boost economic activity and energy demand, but analysts and market participants worry the central bank could risk a slowdown in the job market.
ANZ said, “Market sentiment has improved following the Federal Reserve’s interest rate cut as it is expected to boost the economy.” The weak US dollar has also boosted investor interest.
ANZ also said fighting between Israel and Iran-backed militias had raised concerns the conflict could engulf Iran, the region’s main oil producer.
Heavy fighting broke out between Lebanon-based Iran-backed Hezbollah and Israel on Sunday , with the group firing rockets into northern Israeli territory after suffering the heaviest bombardment of the nearly year-long conflict.
The conflict escalated after thousands of pagers and walkie-talkies used by Hezbollah members exploded last week. The attack was widely blamed on Israel, which has neither confirmed nor denied responsibility.
