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Brent crude futures gained 7 cents, or 0.09%, to $81.20 a barrel
at 1007 GMT. U.S. West Texas Intermediate (WTI) crude futures
rose by 1 cent, or 0.01%, to $77.17.
The Brent and WTI benchmarks lost 1.8% and 3.7% respectively
last week on sagging Chinese demand and hopes of a Gaza
ceasefire agreement.
"A rather muted opening greets oil prices after Middle East
tension is back on the menu due to a reported Hezbollah attack,"
said PVM analyst John Evans, referring to the strike on Golan
Heights.
On Sunday Israel's security cabinet authorized Prime Minister
Benjamin Netanyahu's government to decide on the "manner and
timing" of a response to the attack that killed 12 teenagers and
children.
Israel vowed retaliation in Lebanon against Iran-backed
Hezbollah, which denied responsibility for the attack. Israeli
jets hit targets in southern Lebanon on Sunday.
The tensions have spread to several fronts and are in danger of
spilling into a wider regional conflict, sparking investor
concerns about the potential impact on crude output from the
world's largest oil-producing region.
"Worries over escalating tensions in the Middle East prompted
fresh buying, but gains were limited by lingering concerns of
weakening demand in China," said Fujitomi Securities analyst
Toshitaka Tazawa.
Data released this month showed that China's total fuel oil
imports dropped 11% in the first half of 2024, raising concerns
about the wider demand outlook in the world's biggest crude
importer.
Prices also moved lower on Friday on news that the huge Dangote
oil refinery in Nigeria is reselling cargoes of U.S. and
Nigerian crude after technical problems at the refinery.
Meanwhile, markets are keeping a watch on oil producer Venezuela
after the country's electoral authority said that President
Nicolas Maduro had won a third term with 51% of the vote despite
multiple exit polls pointing to an opposition win.
U.S. Secretary of State Antony Blinken said that the United
States has serious concerns that the results do not reflect the
votes of the people.
The U.S. had previously said it would "calibrate" its sanctions
policy towards Venezuela depending on how the election unfolds
in the OPEC member nation.
(Reporting by Robert Harvey in London, Yuka Obayashi in Tokyo
and Emily Chow in SingaporeEditing by David Goodman)
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