Oil prices rise as Israel-Hamas war rages on; Econ data takes focus

investing.com:

Investing.com-- Oil prices rose on Tuesday, recovering a measure of steep losses as traders continued to seek new developments in the Israel-Hamas war, while a swathe of upcoming readings on business activity also came into focus.

Crude prices tumbled around 3% on Monday as a series of diplomatic missions to Israel and Gaza pushed up hopes over a deescalation in the conflict. This was also accompanied by Hamas agreeing to free some hostages.

The moves saw traders scale back bets that the conflict will spill over into the broader Middle East region, potentially disrupting oil supplies. 

But fighting between Israel and Hamas, particularly missile attacks from both sides, continued this week, while focus was also on a looming ground assault by Israel on the Gaza strip. 

Brent oil futures rose 0.5% to $90.21 a barrel, while West Texas Intermediate crude futures rose 0.4% to $85.86 a barrel by 21:12 ET (01:12 GMT). 

Oil prices had logged two strong, albeit volatile weeks of gains following the onset of the Israel-Gaza war. But they retreated sharply this week amid some profit taking and the absence of any major escalation in the conflict. 

Focus this week is now on key business activity readings from the U.S. and other major economies, as well as a European Central Bank meeting for more cues on the global economy and future oil demand.

Purchasing managers’ index (PMI) readings from Australia and Japan showed on Tuesday that business activity in the two economies remained weak through October. 

Markets are now awaiting flash PMI data from the U.S., due later in the day, to gauge the state of business activity in the world’s largest fuel consumer. 

Both manufacturing and services PMIs are expected to have contracted in