Israel Prepares for Strikes by Iran and Hezbollah

U.S. crude oil prices rose above $77 per barrel on Monday, marking the fifth consecutive day of increases. This surge comes as the Pentagon has increased its military presence in the Middle East, anticipating potential Iranian aggression towards Israel. In a strategic move, Defense Secretary Lloyd Austin has also deployed a guided-missile submarine to the region, heightening concerns over escalating geopolitical tensions. As of Monday, the West Texas Intermediate September contract was priced at $77.69 per barrel, reflecting an increase of 85 cents or 1.11%. Year-to-date, U.S. crude has appreciated by 8.4%. Meanwhile, the Brent October contract reached $80.37 per barrel, up 74 cents or 0.93%, with a year-to-date gain of 4.3%. Gasoline prices also saw a rise, with the RBOB Gasoline September contract climbing to $2.41 per barrel, while natural gas prices increased to $2.23 per thousand cubic feet. Analysts from UBS have indicated that investors are turning to oil and gold as protective measures against the backdrop of rising geopolitical risks. Despite OPEC's recent reduction of its global demand growth forecast by 135,000 barrels per day due to declining consumption in China, the oil market remains resilient. Phil Flynn, a senior market analyst, noted that the market is still poised for a deficit as inventories continue to decline. Last week, U.S. crude oil prices ended more than 4% higher, breaking a four-week downward trend, as the stock market rebounded from a recent sell-off linked to recession fears and the Bank of Japan's slight interest rate hike.