(Bloomberg) -- Oil climbed — after its biggest weekly gain since April — on signs China will step up support for its economy and on fears the conflict between Israel and Hezbollah could morph into a regional war.

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Brent traded near $75 a barrel after rising 4% last week, while West Texas Intermediate was close to $72. Hezbollah launched about 115 rockets, missiles and drones toward northern Israel on Sunday, leading to counterattacks against the Iranian-backed group in Lebanon.

China announced plans for a rare briefing on its economy by three top financial regulators as it cut a short-term policy rate. That bolstered expectations the People’s Bank of China will loosen monetary policy, after the Federal Reserve pivoted to lowering borrowing costs last week.

Brent has rallied around 9% after sinking to its lowest since 2021 earlier this month, with optimism over US rate cuts, as well as fears the hostilities in the Middle East would drag in OPEC producer Iran, supporting prices. However, concerns over a worsening fuel demand outlook, which have made hedge funds the most bearish on diesel on record, have kept gains in check.

“Crude may go into a holding pattern for a bit, consolidating last week’s gains,” said Vandana Hari, the founder of Vanda Insights in Singapore, “Market cheer from the jumbo Fed cut is keeping sentiment aloft. But at some point, we could see crude under renewed downward pressure as the Fed glow fades and oil market attention returns to the souring demand picture.”

The Organization of the Petroleum Exporting Countries will publish its annual World Oil Outlook on Tuesday, potentially offering more insight into consumption patterns.

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