Oil prices jump in response to Middle East conflict

The news: Crude oil prices have climbed following the renewed military conflict in the Middle East, raising prospects for a rebound in inflation in major economies.

The numbers: Benchmark Brent crude oil futures jumped USD2.93, or 3.4% to USD87.51 ($137.42) a barrel on Monday, while US West Texas Intermediate crude (WTI) rose USD3.04, or 3.6%, to USD82.31.

The context: The latest spike in prices comes after Israeli air strikes pounded the Palestinian enclave of Gaza, killing hundreds of people, in retaliation for the bloody attacks by Islamist group Hamas that killed at least 700 Israelis. Investors are worried the renewed conflagration risks a disruption in supplies from the region. Any sustained rally in oil prices would act as a tax on consumers and add to inflationary pressures in economies around the world,