Concerns remain about whether Israel will launch a ground operation in Gaza
Oil prices increased on Tuesday amid escalating tension between Israel and Palestine fueling concerns of tight global supply.
Global benchmark Brent crude traded at $90.41 per barrel at 0714 GMT, a 0.65% rise from the closing price of $89.83 a barrel in the previous trading session on Monday.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $86.01 per barrel, up 0.61% from Monday’s close of $85.49 per barrel.
Oil prices rose with the possibility of the Israel-Palestine conflict spreading to a wider area. The conflict is in a region with major oil producers in the Middle East. Should the fighting reach more countries, investors fear that it could negatively affect the oil supply.
Concerns remain about whether Israel will launch a ground operation in Gaza in the Israeli-Palestinian conflict.
Also, the fall of the US dollar against other currencies aided the rise in oil costs. The US dollar index declined by 0,15% to $105,172.
Meanwhile, predictions that the US Fed will keep the policy rate at the same level for longer than expected continue to gain strength. It is estimated that the bank will keep the policy rate constant in the next three meetings, based on pricing in the money markets.
Investors closely follow the interest rate policy in the US as it indirectly affects oil demand in the world’s biggest oil consumer.