Oil prices settle higher as supply concerns rise on fresh geopolitical tensions

Investing.com-- Oil prices settled higher Monday as reports that Israel struck an Iranian consulate in Syria stoked fresh geopolitical tensions in the Middle East just days ahead of the OPEC+ gathering later this week.  

 At 14:30 ET (19:30 GMT),West Texas Intermediate crude futures rose 0.7% to $83.71 a barrel, and  Brent oil futures rose 0.6% to settle at $87.50 a barrel. 

Israeli strikes hit a building next to Iran's embassy in Syria's capital Monday, according to media reports from Syria and Iran, triggering fresh fears about potential supply disruptions in the oil-rich Middle East region.

The reports if confirmed, is a "clear escalation of conflict in the Middle East and is likely to continue to bolster near-term oil prices," Roth MKM said in a Monday note.

The news boosted bets on tighter global supplies just ahead of the OPEC+ meeting later this week. 

OPEC and its allies, OPEC+, ministers are set for an online meeting Wednesday to review supply and demand in the market as well as how closely members' have stuck to the agreed output cuts.  

Russia and Saudi Arabia, who lead the group known as OPEC+, extended their output cuts of 2.2 million barrels per day until the end of June. 

Russia, however, is expected to cut output to 9 million barrels per day to offset surpluses that were in excess of its agreed production. 

Ministers at the  joint ministerial monitoring committee meeting aren't expected to make fresh recommendations on policy, but oil prices are likely to continue to be supported, led by Saudi's strong discipline to stick with its production curbs. 

"[W]ith Saudi continuing to lead OPEC with disciplined cuts, additional volumes offline during Q2 should keep crude well bid and provide a supportive view on capital investment for service and higher cash flow for upstream operators," TPH&Co. said in a recent note.