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Oil prices climbed more than 2 per cent on Monday as the West Asia conflict rages, with Israel expanding its ground offensive in Lebanon over the weekend.
The capture of the Beaufort Castle in southern Lebanon across the Liatni river marks the deepest incursion by Israel in Lebanon. "My instruction is to deepen and expand our grip on the places that were under Hezbollah's control," an NBC report quoted Netanyahu as saying. "The occupation of Beaufort is a dramatic stage and a dramatic change in the policy that we are leading," he added. U.S. crude futures rose $2.37 or 2.71% to $89.73 a barrel as of 0028 GMT. Brent futures rose $2.16 or 2.37% to $93.28 a barrel, according to Reuters. The renewed offensive comes even as both the Israeli and the Lebanese officials met on Friday in the US for peace talks. The two sides have accused each other of frequently violating a month-old ceasefire. Reports of the US and Iran moving closer to striking a peace deal led to oil prices plummeting last week. However, the weekend development, along with fresh strikes by the US military on Iranian radar and drone sites in the city of Goruk and the island of Qeshm and Kuwait reporting a hostile missile and drone attack, cast a pall of gloom over the energy market. Iran has made it clear that peace in Lebanon will be central to any long-term resolution in the wider US-Iran conflict. China's weak factory data, as reflected in the latest manufacturing PMI, which came in at 50 compared to 50.3 in April, showed that growth momentum in the world's second-largest economy could be slowing. Worries around stalling growth could weigh on crude oil prices. But the bigger worry still remains the West Asia conflict and the continued closure of the Strait of Hormuz, which will put further pressure on the oil supply, keeping the prices high. (ANI)
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