Oil holds on to last week’s gains buoyed by Mideast tensions, economic data

By Colleen Howe

BEIJING (Reuters) – Oil prices were little changed in early Asian trading on Monday, holding on to most of last week’s more than 3% gains, supported by geopolitical tensions and better economic data.

futures fell 7 cents, or 0.09%, to $79.59 a barrel by 0021 GMT, while U.S. West Texas Intermediate crude futures rose 2 cents, or 0.03%, to $76.86.

“Traders remain mindful of simmering tensions in the Middle East,” ANZ analysts said in a note.

The risk of an escalation in the Israeli-Palestinian conflict continued to support prices after Iran and Hezbollah vowed to retaliate for the assassinations of Hamas leader Ismail Haniyeh and Hezbollah military commander Fuad Shukr.

The Israeli incursion into Gaza intensified on Saturday with an airstrike on a school compound that killed at least 90 people, according to the Gaza Civil Emergency Service, though Israel said the death toll was inflated. Hamas cast doubt on its participation in new ceasefire talks on Sunday.

Brent ended last week up more than 3.5% on the week, while WTI gained more than 4%, on supportive economic data and increased hopes of a U.S. interest rate cut.

Three U.S. central bankers said last week that inflation appeared to be cooling enough for the Federal Reserve to cut interest rates as soon as next month.

China’s consumer prices rose faster than expected in July, and U.S. weekly jobless claims fell more than expected last week.