WASHINGTON (dpa-AFX) - Oil prices climbed higher on Tuesday as concerns about the outlook for demand eased a bit after the Chinese central bank announced a slew of stimulus measures to boost the nation's economy.
An escalation in tensions in the Middle East, and reports about formation of a new storm in Gulf of Mexico contributed as well to the rise in oil prices.
The U.S. National Hurricane Center said a potential Tropical Cyclone in the Caribbean was expected to rapidly intensify over the gulf's warm waters and could become a major hurricane with winds of up to 115 miles per hour (185 kph) by Thursday.
West Texas Intermediate Crude oil futures ended up by $1.19 or about 1.7% at $71.56 a barrel.
Brent crude futures were up $1.30 or about 1.8% at $74.51 a barrel a little while ago.
The Chinese central bank said it would lower borrowing costs and inject more liquidity into the system that would free up more money for lending. Regulators also unveiled plans to support stable development of the stock market.
People's Bank of China Governor Pan Gongsheng said the bank will reduce the reserve requirement ratio by 50 basis points. He announced that the rate on seven-day reverse repo will be cut by 20 basis points to 1.50 percent and the rate on one-year medium-term lending facility by 30 basis points.
The bank also framed measures aims to support property market. The minimum down payment ratio for second homes will be reduced to 15 percent from 25 percent. The bank intends to cut the existing mortgage rates and bring it closer to the new mortgage rates.
On the geopolitical front, Israel launched its biggest aerial offensive against Iran-backed Shite militant group Hezbollah.
Israel's military said today it struck dozens of Hezbollah targets in southern Lebanon overnight, a day after launching a wave of airstrikes against the Iran-backed group's sites in Lebanon's deadliest day in decades.
Hezbollah said it had attacked several Israeli military targets, including an explosives factory 60 km (37 miles) into Israel, with the Fadi series of rockets.
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