Oil prices edge higher on Chinese demand optimism, Middle East tension

ISTANBUL

Oil prices increased on Monday over demand optimism in China, the world's second-largest oil consumer, and heightened Middle East tensions as Israel continued to attack Lebanon despite a cease-fire deal.

The international oil benchmark of Brent crude increased 0.11% to $72.42 per barrel at 11.29 a.m. local time (0829 GMT), up from the previous session's close of $72.34.

The US benchmark West Texas Intermediate also rose by 0.06% to $68.51 per barrel, compared to $68.47 at the prior session's close.

China's Caixin manufacturing Purchasing Managers Index (PMI) on Monday came in over expectations at 51.5 for November.

The National Bureau of Statistics PMI on Saturday also rose to 50.3, from 50.1 in October.

The data raised expectations that economic activity in the country will improve amid continued support from Beijing.

Tension increased in the Middle East as the Israeli army continued to violate the cease-fire agreement that came into effect on Nov. 27.

The official Lebanese news agency NNA said the Israeli army on Monday morning opened fire toward the town of Naqoura in southern Lebanon, the latest violation of the cease-fire that entered into force last week.

According to an Anadolu count, the Israeli army committed 11 violations on Sunday by targeting southern Lebanese towns, bringing the total violations since the Nov. 27 cease-fire to 73.

Meanwhile, the strengthening dollar has contributed to restraining crude oil gains. Ahead of US rate cuts, the dollar has bolstered its value, which in turn is making oil priced in dollars more expensive for holders of other currencies. The US dollar index, which measures the US dollar's value against other currencies, rose 0.5% to 106.350.

The Organization of Petroleum Exporting Countries (OPEC) and its allies, known as the OPEC+, will decide production policy for the early months of 2025 on Thursday.