Driven by the risks of overlapping Middle East conflicts and the approach of Hurricane Milton, the international crude oil, which saw a reduction in its upward trend last Friday, regained its strong upward momentum on Monday of this week.

On Monday, October 7th, Eastern Time, during the midday trading session of the US stock market, US WTI crude oil rose to $77.4, with a daily increase of nearly 4.1%. Brent crude oil broke through the $80 mark for the first time since the end of August, approaching $81.20, with a daily increase of nearly 4%. Ultimately, WTI November crude oil futures closed up 3.71%, at $77.14 per barrel, and Brent December crude oil futures closed up 3.69%, at $80.93 per barrel, both刷新ing their closing highs since the end of August and marking five consecutive trading days of gains.

Some comments mentioned the impact of short positions retreating on the recent rise in crude oil prices. Due to the decline in demand prospects, by mid-September, hedge funds and fund managers had accumulated a record amount of bearish bets on oil futures.

UBS analyst Giovanni Staunovo believes that the rise in oil prices on Monday may be due to fund managers closing their bearish crude oil positions, as the risk of disruptions to Middle East oil supplies is rising. Brent Belote, founder of Cayler Capital, a hedge fund focused on commodities, said: "Until a week ago, I thought oil prices would fall below $60."

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Last week, international crude oil accumulated a gain of over 9%. US oil recorded its largest weekly increase since the week of March 31, 2023, and Brent oil recorded its largest weekly increase since October 7, 2022. The biggest driver was Iran's retaliation against Israel for an attack on Hezbollah in Lebanon, launching multiple missiles at Israel, expanding the Middle East conflict, and potentially damaging Iran's oil supply as the third-largest oil producer in OPEC.

If Iran's oil infrastructure becomes a target of Israeli attacks, global supply could be reduced by as much as 4%. Iran's oil production is already close to full capacity, and with escalating tensions, oil production may become even more vulnerable. Moreover, if the scope of the attacks expands to the Strait of Hormuz, which accounts for one-fifth of global demand, it will have a greater impact, as Saudi Arabia, Iraq, the UAE, Kuwait, and Qatar all send goods through this key waterway.

Last Friday, US President Biden claimed he did not know when Israel would respond to the missile attack launched by Iran on the previous Tuesday. Instead, he called on Israel to consider alternative options, showing a tendency to persuade Israel not to attack Iranian oil fields. On the day of his speech, crude oil, which had risen by more than 2% during the trading session, gave up most of its gains. However, news from the weekend to Monday showed that the situation in the Middle East remains tense.

According to CCTV News, the Israeli Defense Forces issued a statement on the evening of the 6th local time, stating that about 5 projectiles were found entering Israeli territory from Lebanon. According to Israeli media reports, the Israeli air defense system failed to successfully intercept the rockets launched from Lebanon, and the attack resulted in several injuries.

On the morning of the 7th, the Israeli Defense Forces stated that after air defense alarms were sounded in several areas near the Gaza Strip, the Israeli military found four rockets fired from southern Gaza into Israeli territory, three of which were intercepted by the air defense system, and the fourth rocket hit an open area. The Palestinian Islamic Resistance Movement (Hamas) claimed responsibility for the rocket attack.

Rebecca Babin, a senior energy trader at CIBC Private Wealth Group, commented: "Anxiety is intensifying. I think the longer we wait, the stronger the fear becomes, just like when you're on a roller coaster, and you expect to fall when you reach the peak."On Monday, another factor driving oil prices was Hurricane Milton. Local time on Monday, Milton rapidly intensified into a Category 5 hurricane in the eastern Gulf of Mexico and moved towards Florida, potentially causing disruptions to oil supplies in the Gulf of Mexico. Energy giant Chevron had already evacuated staff from a drilling platform in the Gulf of Mexico and halted production on Monday.

A Category 5 hurricane implies that when the hurricane passes, the roofs of residential and industrial buildings may "completely collapse", and movable houses may be "completely blown away".

The National Hurricane Center (NHS) stated on Monday that Milton's maximum sustained wind speed was 175 miles per hour (282 kilometers per hour). Local officials in Florida said they were preparing for the largest evacuation since Hurricane Irma in 2017, when about 7 million people in the state left their homes. The NHS forecast in Tampa Bay, Florida, warned: "If Milton continues to develop along the current wind path, the Tampa area will experience the most severe storm in more than 100 years locally."