Oil prices rose 3% this week amid heightened escalation in the Middle East

November Brent crude futures rose 3% this week to a 2-week high of $73.7/barrel (+6.4% for the week, -4.5% for the month), fully reversing the previous week's decline.

The driver of the increase was Israel's operation to blow up the pagers of Hezbollah members, which resulted in the death of 11 people and the wounding of more than 4,000 militants. Quotations were also supported by better-than-expected data on the US economy and interruptions in oil exports from Libya.

According to CNN, about 5,000 pagers ordered by Hezbollah contained between 28 and 56 grams of explosives, located next to the battery. And the virus program launched in the device led to rapid heating and explosion of batteries. At the same time, the Israeli authorities neither confirm nor deny participation in the attack on Hezbollah fighters, which Lebanon accuses it of.

Fears that the war between Israel and Hamas could spill over into Lebanon and disrupt crude oil supplies from the Middle East will send oil prices higher. For now, everyone is waiting for Iran and Hezbollah to respond to this attack, as it will increase speculative demand for oil and help prices rise.

Against higher oil prices yesterday, December palm oil futures on Bursa Malaysia fell 1% to 3,735 ringgit/t or $878/t (-2.2% on the week) amid India's decision to raise duties on vegetable imports oils by 27.5%. The ringgit continues to strengthen against the dollar, making palm oil more expensive for exporters.