Oil prices surge toward $120 amid West Asia tensions, Fed decision

Oil prices are heading into a critical week shaped by escalating tensions in West Asia and the outcome of the Federal Open Market Committee's October 27-28 meeting, market analysts said. With Brent crude already crossing the $117 per barrel mark, investors are closely monitoring potential disruptions to energy supply through the Strait of Hormuz and broader threats to regional infrastructure.

Market direction will be heavily influenced by multiple data points and policy cues. The American Petroleum Institute and the US Energy Information Administration are set to release their weekly crude inventory estimates, while Cushing crude stockpile figures and the Fed's policy announcement are expected to guide trader sentiment in the coming days.

"The near-term bias remains bullish but highly headline-driven; traders should avoid chasing sharp rallies and monitor geopolitical developments, Fed guidance and weekly inventory data for directional confirmation," said Ajit Mishra, senior vice president of research at Religare Broking.

Analysts cautioned that any actual disruption to energy infrastructure in the region could trigger sharper price spikes, while the Fed's interest rate decision could either amplify or temper crude's rally depending on how markets interpret monetary policy signals.