On Friday morning (September 20th) in the Asian market, international oil prices fluctuated narrowly, with US crude oil October futures currently trading around $72.01 per barrel. On Thursday, oil prices continued their recent upward trend, rising more than 1%. US crude oil futures for October hit a two-week high of $72.49 per barrel, closing at $72.07 per barrel. The significant interest rate cuts by the US and the decline in global inventories overshadowed demand concerns. In addition, US officials acknowledged that Biden could not achieve a ceasefire in Gaza, while Israel's fierce attacks on Lebanon also provided support for oil prices.

Brent crude oil futures settled at $74.88 per barrel on Thursday, up $1.23 or 1.7%. US crude oil futures for October closed at $71.95 per barrel on Thursday, up $1.04 or 1.5%.

After falling below $69 for the first time in nearly three years on September 10th, oil prices began to rebound. In the following seven trading days, two major indicators of crude oil saw an increase in five trading days.

The Federal Reserve lowered interest rates by 50 basis points on Wednesday. Interest rate cuts usually promote economic activity and energy demand, but some people believe that a significant rate cut is a sign of a weak US labor market, but the Federal Reserve Chairman denied it at a press conference and expressed confidence in the US economy.

Thursday's data also supports Powell's viewpoint. Data shows that the number of initial jobless claims in the United States fell to the lowest level in four months last week, and the number of people receiving unemployment benefits continued to decline to the level since early June, indicating stable employment growth in September and confirming that the economy continued to expand in the third quarter.

Carl Weinberg, Chief Economist of High Frequency Economics, said, "These hard data confirm the message conveyed by Federal Reserve Chairman Powell yesterday. The labor market is softening, but there will not be the kind of collapse expected in a recession. The goal of Federal Reserve policy is to support the job market before an economic recession forms

Moreover, due to the Federal Reserve's interest rate cut cycle, on the one hand, it has boosted demand expectations, and on the other hand, the weakening of the US dollar index has also provided support for oil prices.

The US dollar index, which measures the exchange rate of the US dollar against a basket of six currencies, fell 0.38% to 100.64 on Thursday after reversing its early gains; The market is working hard to digest the Federal Reserve's significant 50 basis point interest rate cut and shift towards a loose monetary policy stance.

In addition, UBS analysts stated in a report to clients that the decline in global crude oil inventories should support oil prices in the future, pushing Brent crude prices back above $80 in the coming months.

Government data on Wednesday showed that US crude oil inventories fell to their lowest level in a year last week.

Citi analysts have stated that they anticipate a seasonal oil market shortage of approximately 400000 barrels per day in the next quarter, which will support Brent crude oil prices to remain in the range of $70 to $75 per barrel.

However, Citigroup also stated that due to the deterioration of the global oil balance in most scenarios by 2025, they still expect oil prices to weaken again in 2025, with Brent crude oil falling to $60

The geopolitical situation that currently provides the main support for oil prices is volatile. Following the pager explosion the day before, a similar explosion occurred on Wednesday with the walkie talkie used by the Lebanese armed group Hezbollah.

Later on Thursday, Israeli warplanes launched the most fierce attack in nearly a year on southern Lebanon, intensifying the conflict between Israel and the Lebanese armed group Hezbollah. At the same time, the United States and the United Kingdom call on both sides to exercise restraint.

The White House stated that a diplomatic solution is achievable and urgent, and the UK calls for an immediate ceasefire between Israel and Hezbollah. White House spokesperson Jean Pierre said at the briefing that the United States is "concerned about the potential escalation of the situation and expresses concern".

The Israeli military stated that during the operation on Thursday evening, Israeli fighter jets hit hundreds of multiple rocket launchers in southern Lebanon within two hours, which were preparing to launch towards Israel.

According to the Lebanese national news agency NNA, after 9 pm local time, southern Lebanon was bombed more than 52 times. Three Lebanese security sources stated that this is the most intense airstrike since the conflict began in October.

The Israeli military has vowed to continue striking Hezbollah and stated that Thursday's strike hit approximately 100 rocket launchers and other targets in southern Lebanon.

The Israeli Defense Minister stated that Israel will continue to take military action against Hezbollah, and "over time, Hezbollah will pay an increasing price".

Hezbollah leader Sayyed Hassan Nasrallah said in a televised speech on Thursday that the communication equipment explosions on Tuesday and Wednesday "crossed all red lines".

The enemy has surpassed all controls, laws, and morals, "he added, adding that these attacks" can be considered war crimes or equivalent to declaring war.

Israel has not directly commented on the explosion of the pager and walkie talkie, and security sources suggest that it may have been carried out by the Israeli spy agency Mossad.

The United Nations Security Council will hold a meeting on Friday regarding the explosion incident. Lebanese Prime Minister Najib Mikati called on the Security Council to take a firm stance to stop Israel's "aggression" and "technological warfare". Investors need to pay close attention.

Additionally, recent reports indicate that US officials acknowledge that Biden is unable to achieve a ceasefire in Gaza.

The report points out that the Biden administration will not stop seeking to reach an agreement, believing that this is the only way to end the Gaza War and prevent the rapidly escalating conflict between Israel and Hezbollah in Lebanon.

The White House has previously stated that the warring parties have agreed to "90%" of the agreement text, so there is still hope for a breakthrough. But several senior officials from the White House, State Department, and Pentagon believe that the warring parties will not agree to the current framework.

An official from an Arab country said shortly after the pager attack on Hezbollah, "There is no chance to achieve this goal now. Everyone is watching and waiting for the situation after the election. The result will determine what the next government can do

Daily chart of US crude oil futures for October