NEW YORK, Oct 11, V7N- Oil prices surged by about 4% on Thursday, driven by several factors, including heightened U.S. fuel demand before Hurricane Milton's impact on Florida, risks to Middle Eastern oil supplies, and signs of potential energy demand growth in the U.S. and China.

In the U.S., Hurricane Milton disrupted fuel supplies across Florida, leading to power outages affecting over 3.4 million homes and businesses. Analysts noted that closures of fuel terminals and pipeline disruptions would likely continue affecting supplies into the following week. This uncertainty boosted U.S. gasoline futures, which rose by around 4.1%.

Geopolitical tensions also contributed to the spike. Earlier in the month, Iran had launched more than 180 missiles at Israel, raising concerns of retaliation that could target Iranian oil infrastructure. Although Israel had not responded at the time, investors remained cautious, as Israeli officials warned of a potential lethal and precise strike against Iran if provoked further.

In the Middle East, Israeli strikes in Lebanon targeted Hezbollah figures, and the Houthi group in Yemen continued attacks on shipping in the Red Sea, citing solidarity with Palestinians in the Israel-Hamas war.

On the demand side, China introduced a draft law to boost private sector development, potentially stimulating oil demand as the country aims to shore up investor confidence amid economic slowdown. In the U.S., markets anticipated possible Federal Reserve interest rate cuts in November following data indicating a rise in weekly jobless claims and the lowest inflation rate since February 2021. Lower interest rates could further fuel economic growth and boost oil demand.

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