Due to the escalating tension in the Middle East, crude oil prices rose at the opening of this week, but the bearish sentiment in the oil market is far from extinguished, with prices slightly falling after the increase.

In addition, major global economies have entered a loose monetary policy cycle, which has also had a positive impact on oil prices, but the market remains cautious about the long-term effects of these policies.

As of the time of writing, Brent crude oil futures rose by 2.32% to $74.9 per barrel. Brent crude oil had previously fallen to a three-year low earlier this month.

USA WTI crude oil rose by 2.4% last week to $72.1.

However, some analysts suggest that as the impact of rate cuts fades, the oil market may refocus on the issue of weak demand, leading to renewed downward pressure on crude oil prices.

Escalation of geopolitical conflicts, the global initiation of an interest rate cut cycle, supporting the rise in oil prices.

According to CCTV International News, Israeli media reported that the Israeli army's Arabic-speaking spokesperson once again warned Lebanese citizens in Arabic on its social media account today, stating, "If you are near or inside buildings belonging to Hezbollah or buildings used to store weapons and equipment, you should immediately leave at least one kilometer away, or escape the area." Israeli media reported that this indicates that the Israeli military is planning a new round of large-scale airstrikes against targets in Lebanon.

Analysts believe that these strikes may bring the conflict between OPEC oil-producing country Iran, which supports Hezbollah, and Israel closer, and may trigger a broader war in the entire region.

IG analyst Yeap Jun Rong told Reuters in an interview: "The escalating geopolitical tensions in the Middle East between Israel and Hezbollah may provide strong support for oil prices under broader regional conflict risks."

JPMorgan CEO Jamie Dimon also stated in an interview with CNBC that the escalation of geopolitical crises and the deterioration of global stability are the primary risk factors for global energy issues.

"Geopolitics are getting worse, not better. There could be accidents in energy supplies. Right now, there are a lot of wars happening."

Previously, Dimon had mentioned that the Russia-Ukraine conflict is the biggest risk he sees the world facing, bigger than high inflation or a US economic recession.

In addition, major global economies have successively begun to ease monetary policies, which to some extent has alleviated the downside risks of crude oil prices.

Last week, the Federal Reserve aggressively cut interest rates by 50 basis points, while the European Central Bank had previously lowered the key deposit rate by 25 basis points.

Today, the People's Bank of China announced that it will reduce the reserve requirement ratio by 0.5 percentage points in the near future, providing approximately 1 trillion yuan of long-term liquidity to the financial market. It may also opportunistically cut the reserve requirement ratio by 0.25-0.5 percentage points before the end of the year.

What will be the trend of oil prices? After the impact of interest rate cuts diminishes, demand remains a key issue.

Vandana Hari of Vanda Insights told Bloomberg: "Crude oil prices may temporarily enter a consolidation phase, consolidating last week's gains."

However, as the impact of the interest rate cuts fades, prices have been largely absorbed, and traders will soon shift their focus back to the demand side. Vandana Hari said:

"The enthusiastic market response to the significant interest rate cuts by the Federal Reserve has boosted market sentiment. However, at some point, as the spotlight on the Federal Reserve dims, the oil market attention will shift back to the deteriorating demand situation, and we may see crude oil prices facing downward pressure again."

ING commodity analyst mentioned in a report last week: "Due to poor profit margins, European refiners have lowered their operating rates."

Meanwhile, U.S. oil producers are evacuating workers from oil production platforms in the Gulf of Mexico, with expectations of a second hurricane sweeping through offshore oil fields within two weeks. Several oil companies have paused production.