Oil Rises 2% as War Continues in Middle East

Brent crude prices jumped by about 2%, Wednesday, ahead of meetings of central banks around the world this week, including the Federal Reserve, while markets closely await developments in the conflict in the Middle East.

Brent crude futures rose $1.68 or 0.2% to $86.70 per barrel, while West Texas Intermediate (WTI) rose $1.72 or 2.15% to $82.74.

The Federal Reserve issues its interest rate decision later today, and is widely expected to keep interest rates unchanged, according to the CME FeedWatch tool.

In Europe, euro zone inflation recorded its lowest levels in two years, leading expectations that the European Central Bank will not raise interest rates soon, while the Bank of England is expected to stabilize interest rates at its meeting tomorrow, Thursday.

Reuters reported that interest rates aimed at curbing inflation may slow economic growth and reduce demand for oil.

In China, the world's largest oil importer, factory activity contracted unexpectedly during October, which added to the disappointing data, raising doubts about the weakness of the country's economic recovery.

As for Middle East tensions, Calum Macpherson, head of the commodities department at Investec said that unless there is an escalation or other risks resulting from the Gaza war, oil will find it difficult to maintain prices at their current high levels without support from OPEC Plus until 2024, which gives great importance to its meeting at the end of this month.