On Monday, oil prices continued to rise due to concerns that escalating violence from the Gaza conflict might impact oil supplies in the Middle East. Additionally, anticipated cuts in U.S. interest rates improved global economic prospects and increased expectations for fuel demand.

In one of the most significant confrontations in over 10 months of border conflict, Hezbollah launched hundreds of rockets and drones into Israel on Sunday. In response, the Israeli military reported using about 100 aircraft to strike Lebanon in an effort to prevent a larger assault.

On Friday, both oil benchmarks rose by over 2% following comments from U.S. Federal Reserve Chair Jerome Powell, who supported the imminent initiation of interest rate cuts. ANZ analysts noted that the anticipated easing of monetary policy improved market sentiment across various commodities. They also expect the Fed to carry out a gradual series of rate reductions.

Despite the recent rise, oil prices declined last week due to a weak economic outlook for major economies, which dampened fuel demand, according to the bank. Additionally, oil traders are wary of the decisions made by the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, which is expected to increase production later this year, noted Priyanka Sachdeva, senior market analyst at Phillip Nova.