Oil prices rise due to tensions in the Middle East | National

Oil prices jumped on Monday after an escalation in hostilities between Israel and the Iran-backed Lebanese militant group Hezbollah raised fears of a wider conflict in the Middle East.

The global benchmark Brent rose by more than three percent and was trading at a price of over $81 per barrel.

Stock markets were mixed and took a breather after US Federal Reserve Chairman Jerome Powell gave investors a boost last week by announcing an impending interest rate cut.

Israel and Hezbollah exchanged fire on Sunday after ten months of cross-border clashes.

Hezbollah said it had launched a large-scale drone and missile attack on Israel.

Israel said it had carried out airstrikes on Lebanon that destroyed “thousands” of Hezbollah rocket launchers and thwarted a major attack.

The oil market also reacted to the Libyan government's announcement in the east of the country that it would close the oil fields under its control and “suspend all production and exports until further notice.”

The move by the government in Benghazi, which controls most of the country's oil fields, came amid rising tensions after the UN-recognized government in the capital Tripoli ousted the governor of the central bank on Monday morning.

– Stock markets diverge –

In terms of stocks, Wall Street opened mixed: Dow and S&P 500 extended their gains, while the technology-heavy Nasdaq declined.

The Paris CAC 40 rose in afternoon trading, while Frankfurt and Milan were unchanged. London was closed for a holiday.

In Asia, Tokyo and Seoul closed in the red, but Hong Kong and most other stock exchanges gained.

“It looks like the market has shown a very big uptrend over the last three weeks. Now we are seeing some profit-taking,” said Adam Sarhan of 50 Park Investments.

Stock prices jumped on Friday after Powell said at a summit of central bankers in Wyoming that “the time has come” for the Fed to cut interest rates, which have been raised to a 23-year high, to curb inflation.

The Fed is now expected to cut its key interest rate at its next meeting on September 17 and 18. The only doubts are how big this cut will be and how many more will follow.

The comments helped send all three major New York indexes up more than one percent on Friday.

Powell stressed that the “timing and pace” of the cuts depend on the data, so analysts will be closely monitoring the indicators in the coming weeks.

New figures on US economic growth in the second quarter will be released on Thursday, followed by the Fed's preferred inflation measure – the personal consumption expenditures (PCE) price index – on Friday and jobs data next week.

In early August, weak labor market data rocked markets as analysts feared the Fed had waited too long to cut interest rates and avoid a recession.

Analysts at Deutsche Bank expect the Fed to cut interest rates by 0.25 percentage points next month, but weak labor market data could shift the focus to a half-percentage-point cut.

– Key figures around 14:00 GMT –

North Sea Brent oil: Increase of 3.1 percent to USD 81.47 per barrel

West Texas Intermediate: Up 3.5 percent to USD 77.48 per barrel

New York – Dow: Plus 0.5 percent to 41,373.39 points

New York – S&P 500: Plus 0.1 percent to 5,639.11

New York – Nasdaq Composite: 0.3 percent decline to 17,824.37

Paris – CAC 40: Plus 0.4 percent to 7,603.74

Frankfurt – DAX: unchanged at 18,630.65

London – FTSE 100: Closed due to public holiday

Tokyo – Nikkei 225: 0.7 percent less to 38,110.22 (closing price)

Hong Kong – Hang Seng Index: Increase of 1.1 percent to 17,798.73 (closing price)

Shanghai – Composite: Flat at 2,855.52 (closing price)

Dollar/Yen: Rise to 144.45 yen from 144.34 yen on Friday

Euro/Dollar: Down to $1.1156 from $1.1193

Pound/Dollar: Down to $1.3183 from $1.3209

Euro/pound: Down to 84.62 pence from 84.70 pence

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