HG MARKETS:

Oil prices experienced a significant rise in Asian trading on Thursday, spurred by Israel’s intensified rhetoric towards Iran, while market attention turned to upcoming PMI( Purchasing Managers Index) data from key economies. After enduring two weeks of considerable losses, crude prices are attempting a rebound, although overall gains have remained limited. Prices were pushed further down on Wednesday as U.S. inventory reports indicated a larger-than-expected increase in crude stockpiles.Brent oil futures for December climbed 1% to $75.72 a barrel, and West Texas Intermediate crude futures increased by 1.1% to $71.57 a barrel.

Traders are bracing for a possible escalation of tensions in the Middle East, especially after Israeli Defense Minister Yoav Gallant stated that the world would recognize Israel’s might following military actions against Iran. This commentary comes amid rising expectations of a retaliatory strike against Iran following October 1 attack, marking Tehran’s second major assault on Israel in the past six months. Concerns over a potential intensification of the conflict have driven oil prices higher, as traders are factoring in risks associated with possible Israeli attacks on Iranian oil and nuclear facilities.

Israel has also intensified its operations against Hamas and Hezbollah this week, leading to retaliatory actions from these groups. This escalation takes place despite U.S. efforts to broker peace in the region ahead of the November 5 presidential election, which could influence future U.S. policy; however, the chances of achieving a ceasefire seem narrow.

Attention on Thursday also focused on key purchasing managers’ index (PMI) reports from the Eurozone and the U.S. for insights into the health of the world’s largest economies. Eurozone activity is expected to remain in contraction, while U.S. activity is predicted to benefit from strength in the services sector. Signs of resilience in the U.S. economy could bolster expectations for a slower pace of interest rate cuts by the Federal Reserve, a sentiment that has pressured oil markets recently. Meanwhile, strong performance in major global economies may enhance the outlook for crude demand, though sluggish growth in China, the leading oil importer, may offset these positive trends.