Oil Prices Rise Amid Demand Concerns

Oil prices rose Monday, regaining some ground after last week's steep losses, with weak global demand and potential supply disruptions in the Middle East in focus.

At 08:15 ET (12:15 GMT), Brent oil futures rose 1.7% to $74.27 a barrel, while West Texas Intermediate crude futures rose 2% to $70.06 a barrel.

Oil Nurses Steep Weekly Loss

Oil prices were nursing their worst week since early September—with Brent settling down more than 7%, while WTI lost around 8%. These were their biggest weekly declines since September 2, due to slowing economic growth in China and falling risk premiums in the Middle East.

Sentiment slightly improved Monday after the People's Bank of China cut its benchmark loan prime rate as part of broader stimulus measures to revive the economy.

Data revealed that China's economy grew at the slowest pace since early 2023 in the third quarter, fuelling concerns about oil demand. Despite China's targeted stimulus measures, they failed to inspire confidence among traders due to a lack of details on scale and timing.

Middle East Tensions Persist

The Middle East conflict intensified over the weekend as Israel continued its offensive against Hamas and Hezbollah in Gaza and Lebanon, respectively. Israel announced plans to strike Beirut sites linked to Hezbollah’s finances.

The Israel-Hamas war, approaching its one-year mark in October, has been a key driver of oil prices, with traders adjusting their risk premiums based on the conflict's status. U.S. attempts to broker a ceasefire have yielded few results thus far.

Oil Fundamentals Bearish – UBS

Despite geopolitical risks, oil market fundamentals remain bearish, according to UBS analysts. While the ongoing conflict initially raised concerns about supply disruptions, direct risks have diminished.

UBS maintains that for 2025, the market is expected to be nearly balanced, assuming no unwind of OPEC+ production cuts. A significant factor in the bearish outlook is weaker-than-expected demand from China, a critical driver of global oil consumption. UBS has downgraded its 2024 global oil demand growth forecast by 0.1 million barrels per day to 0.9 million barrels per day.

*(Ambar Warrick contributed to this article.)