The price of oil has risen sharply on the back of a massive economic stimulus programme in China as worries about a broader Middle East conflict increase.
The benchmark price of oil rose by about a dollar as news of the latest bout of Israeli bombing in Lebanon broke.
A barrel of Brent crude now costs $75.12, close to the highest point since the start of the month.
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Economic growth expectations, as always, have been impacting prices too.
Top oil importer China announced overnight a new stimulus programme to grow its struggling economy.
Concerns over the slowdown in the world’s second-largest economy, were part of the reason a barrel of Brent crude had hit a near three-year low earlier this month.
But China implemented a range of interventions to kickstart growth. The Chinese central bank reduced the amount of money banks are required to reserve and slashed interest rates on loans to commercial banks.
It’s intended to address the property market slump and boost weakened consumer demand. Not since the pandemic has such an intervention taken place.
Another reason prices had been suppressed was the prospect of increased supplies from the OPEC+ group of major oil-producing nations.
While the price has moved above the $70 low of two weeks ago, it is still comparatively low. For most of the last year, a barrel has cost over $80.
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Sky News reports from southern Lebanon during Israeli strikes
Because of the recent lows and the strength of the pound against the US dollar, automotive services firm RAC said prices at the pumps are now falling more quickly than at any other time this year and could drop further in the coming weeks.
The average price of petrol and diesel across UK forecourts is nearly 7p per litre cheaper than a month ago, and is the lowest motorists have seen in almost three years.
Currently, the cost of filling a 55-litre family car is almost £4 cheaper than a month ago.
It can take roughly ten days for crude oil prices to filter through to petrol and diesel prices.
Israel has been bombing Hezbollah terrorist targets in Lebanon as the group fired rockets into Israeli territory. Monday was the deadliest day of attacks in more than a decade.
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Lebanon said 492 people were killed in Israeli strikes, the biggest single-day death toll in the country for more than a decade.