Oil futures were trading with some volatility on Monday. The market could continue to react to the escalating tensions in the Middle East as confrontations between Israel and Hezbollah continue.
Heightened concerns over a broader conflict disrupting regional oil supplies could add upward pressure to the market.
At the same time, the Federal Reserve’s interest rate cut last week and the potentially softer monetary policy could support demand in the US over the long term.
However, concerns about an economic slowdown in major markets like China and the U.S. could continue to temper price gains.
Traders could continue to monitor the developments in the conflict in the Middle East and its impact on crude supply. Despite the geopolitical risks supporting oil prices, the market remains cautious as the Middle East conflict has not yet significantly impacted supply.
The market could also remain attentive to new economic data releases. In this regard, weaker-than-expected PMI data in Europe added to the concerns regarding oil demand. US PMI data could also affect the market’s direction when released later today.
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