WASHINGTON (dpa-AFX) - Oil prices rose more than 1 percent on Monday as traders braced for escalating conflict in the Middle East following an Israeli strike on Hezbollah targets in southern Lebanon.
Benchmark Brent crude futures jumped 1.1 percent to $78.97 a barrel, while WTI crude futures were up 1.2 percent at $75.72.
Investors fretted about a regional war after a round of high-level talks in Cairo meant to bring about a ceasefire and hostage deal to temporarily end the 10-month Israel-Hamas war in Gaza ended on Sunday without a final agreement.
Israeli and Hezbollah forces engaged in extensive exchanges of fire early Sunday morning along the Israel-Lebanon border, marking a significant escalation in their longstanding conflict.
About 100 Israeli warplanes struck and destroyed 'thousands' of Hezbollah rockets and missile launcher barrels to be launched at the country, the Israel Defense Forces (IDF) said in a statement on Sunday.
The militant group responded by firing more than 200 projectiles that did limited damage, according to Israeli officials.
The upside in oil prices also reflected optimism about the outlook for U.S. demand after Federal Reserve Chair Jerome Powell signaled the central bank is prepared to begin cutting interest rates.
'The time has come for policy to adjust,' Powell said at the Jackson Hole Economic Symposium, although he noted the 'timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.'
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