09:17 AM EDT, 10/07/2024 (MT Newswires) -- Oil prices continued to push higher early on Monday, climbing for a firth-straight session on expectations Israel is readying to retaliate against Iran following last week's missile attack on the country, heightening anxiety over a wider Middle Eastern war that could threaten Persian Gulf supplies.

West Texas Intermediate crude oil for November delivery was last seen up US$0.86 to US$75.24 per barrel, the highest since Aug,28, while December Brent crude, the global benchmark, was up US$0.81 to US$78.86.

October 7 is the first anniversary of the terrorist attack on Israel by the Hamas militant group that sparked Israel's ongoing war in Gaza to destroy the Iran-backed militia and its recent invasion of Lebanon. Though the violence has since killed thousands, there was little threat of the war spreading to the oil-rich Persian Gulf region until last week's missile attack on Israel by Iran. Israel, backed by the United States, is now expected to retaliate with its own strike against Iran's oil infrastructure.

"Iran's missile attack on Israel last week has raised expectations for a retaliatory strike that would likely serve the purpose of weakening Iran's economy through various forms of attack, whether direct or indirect. Crude oil jumped the most last week since January 2023 for fear that an attack on Iran's oil and gas industry may lead to tight supply and potentially widen the conflict," Ole Hansen, head of commodity strategy at Saxo Bank, noted.

However the outlook for oil remains mostly bearish, with OPEC+ readying to begin returning 2.2-million barrels per day of production cuts to the market with monthly additions of 180,000 barrels per day starting in December. As well, Libyan exports are returning to their 1.2-million bpd capacity after being restricted to around 450,000 bpd amid a political dispute in the North African country. Global demand also remains light as the economy of China, the No.1 importer, continues to struggle.

"While nothing can touch the emotion that the conflict has brought to the oil community, it has been well and truly smothered by macro-economic considerations that have thwarted any idea of an increase in global demand," PVM Oil Associates noted.