Oil prices rose sharply on Monday as possibility of disruptions in supply due to escalating tensions in the Middle East outweighed OPEC's monthly report that lowered the demand forecast for 2024.

The Organization of the Petroleum Exporting Countries, in its monthly report published on Monday lowered the demand forecast for 2024 citing lower demand conditions in China. According to the OPEC report, world oil demand is expected to rise by 2.11 million barrels per day in 2024, versus 2.25 million barrels per day anticipated in the previous month's report.

West Texas Intermediate Crude oil futures for September ended up $3.22 or about 4.2% at $80.06 a barrel.

Brent crude futures climbed to $82.30 a barrel, gaining $2.64 or about 3.3%.

In geopolitical news, US Defense Secretary Lloyd Austin ordered an aircraft carrier heading to the Middle East to sail more quickly as tensions mount in the region following high-profile assassinations blamed on Israel and the threat of retaliation.

Lloyd reportedly gave the orders on the basis of his talk with Israeli Minister of Defense Yoav Gallant Sunday.

The Defense ministers of the two countries also discussed Israel's operations in Gaza and the importance of mitigating civilian harm, progress towards securing a ceasefire and the release of hostages held in Gaza, and US-Israel joint efforts to deter aggression by Iran, Lebanese Hezbollah, and other pro-Iran groups across the region.

Within hours of the talks, Hezbollah militants reportedly fired dozens of rockets toward northern Israel.

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