Oil rises on Mideast tensions but virus concerns weigh

LONDON: Oil prices rose towards $71 a barrel on Thursday on rising Middle East tensions, while fresh movement restrictions imposed by countries to counter a surge in COVID-19 cases threatened the demand recovery.

Brent crude oil futures rose by 31 cents, or 0.44%, to $70.69 a barrel by 1217 GMT after earlier dipping below $70 for the first time since July 21.

US West Texas Intermediate (WTI) crude futures rose 37 cents, or 0.54%, to $68.52. Both benchmarks fell by more than $2 a barrel on Wednesday.

Offsetting the Mideast tensions, concerns over the recovery of global oil demand grew amid a surge in coronavirus cases.

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Japan is poised to expand emergency restrictions to more prefectures while China, the world's second-largest oil consumer, has imposed curbs in some cities and cancelled flights, threatening fuel demand.

"China is now facing its most challenging COVID-19 crisis since the initial outbreak was brought under control," analysts at consultancy FGE said in a note on Thursday.

In the United States, the world's biggest oil consumer, COVID-19 cases hit a six-month high with more than 100,000 infections reported on Wednesday, according to a Reuters tally.

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Analysts at investment bank UBS, however, said they expect oil prices to resume their upward trend despite pandemic concerns, projecting Brent crude will trade between $75 and $80 per barrel in the second half of 2021.