After hundreds were murdered in an explosion at a Gaza hospital on Wednesday, tensions in the Middle East increased, raising worries about possible interruptions in the region’s oil supply.

At 0609 GMT, the price of Brent oil futures increased $1.75, or 2%, to $91.65 a barrel. The price of a barrel of West Texas Intermediate crude (WTI) futures increased by $1.91, or 2.2%, to $88.57.

Both benchmarks increased by over $2 in previous trades, reaching their best levels in two weeks. Markets took into account risk premiums following a bombing at a hospital in Gaza City on Tuesday that killed hundreds of Palestinians and was attributed to Israeli and Palestinian officials.

Later, Jordan called off a meeting it had planned to convene with Joe Biden, the president of the United States, and the presidents of Egypt and Palestine.

In a client note, Vivek Dhar, an analyst at Commonwealth Bank of Australia, stated that the chance of a diplomatic resolution to the Israel-Hamas conflict has decreased due to the cancelation of a meeting between Biden and Arab leaders.

A predicted Israeli ground attack in Gaza has markets on edge. “A long occupation looms as the scenario that pushes Brent oil futures above $US100/bbl because it raises the risk that the Israel-Hamas conflict expands and potentially draws in Iran directly,” Dhar stated.

Biden is scheduled to travel there on Wednesday to help Israel in its conflict with the Islamist militant group Hamas. According to the White House, he will make it clear that he does not want the crisis to worsen.

U.S. crude stockpiles decreased by around 4.4 million barrels in the week ending October 13, according to market sources quoting American Petroleum Institute data on Tuesday, helping to bolster oil prices. That was substantially steeper than the analysts’ predicted 300,000 barrel draw.

Later on Wednesday, the U.S. government must provide official figures. According to official statistics released on Wednesday, China’s economy expanded more quickly than anticipated in the third quarter regarding demand, suggesting that a recent flurry of policy changes is supporting a shaky recovery.

Official statistics from China also revealed that the nation’s oil refineries produced a record amount of oil per day in September, up 12% from a year earlier, as refiners upped run rates to meet the high demand for transportation fuel over the Golden Week vacation and to support growing manufacturing.

However, Analysts cautioned on China’s economic development since the real estate industry continues to be a drag. “The September numbers almost certainly ensure that China will achieve its ‘about 5%’ growth objective this year. However, I will work hard to improve it. According to economist Harry Murphy Cruise of Moody’s Analytics, the economic recovery is still in its early stages.

Meanwhile, the Federal Reserve is anticipated to raise interest rates once more before year’s end after September retail sales in the United States exceeded estimates. Inflation-controlling interest rate increases may limit economic expansion and lower energy consumption.

Tuesday saw an agreement between Venezuela’s government and political opposition on electoral assurances for the 2024 presidential elections, opening the door for potential sanctions relief from the United States that might eventually increase the oil supply.