Oil prices fell more than $1 a barrel as traders took profits from a rally in the previous session that lifted the market to its highest level in over a month on fears the Middle East could be on the brink of a region-wide conflict, Reuters reports.

Brent crude futures fell $1.31, or 1.6 per cent, to $79.62 per barrel at around 0600 GMT. US West Texas Intermediate futures fell $1.29, or 1.7pc, to $75.85 a barrel.

Fighting in the region intensified after Iran-backed Hezbollah fired rockets at Israel’s third-largest city, Haifa, and Israel looked poised to expand its offensive into Lebanon, a year after the Hamas attack that sparked Israel’s ongoing onslaught in Gaza.

“The geopolitical tensions in the Middle East rock on, but there has been some paring of exposure lately on some expectations that any disruptions to energy supplies may be more measured,” said Yeap Jun Rong, market strategist at IG.