2024-04-09 01:55:31
Oil prices rose in early Asian trading on Tuesday, following hopes diminished that negotiations between Israel and Hamas would lead to a ceasefire in the Gaza Strip and ease tensions in the Middle East.
By 00:32 GMT, Brent crude futures rose 40 cents to $90.78 per barrel, and US West Texas Intermediate crude rose 35 cents to $86.78.
Gaza Strip and oil prices
A new round of ceasefire discussions between Israel and Hamas in Cairo ended a multi-session rally on Monday, pushing Brent to its first decline in five sessions and WTI for the first time in seven sessions once morest the backdrop of a possible decline in geopolitical risks.
But Israeli Prime Minister Benjamin Netanyahu said on Monday that an unspecified date has been set for the Israeli invasion of the city of Rafah in the southern Gaza Strip.
Markets analyst at IG, Tony Sycamore, said that Netanyahu’s statements “put an end to the hopes that briefly prevailed in the market yesterday that geopolitical tensions in the region may subside.”
The Iranian response and the oil market
The market continues to evaluate the risks of interruption in oil supplies, and ANZ analysts said, in a note to clients, that the Iranian response to the Israeli attack on its consulate in Syria “may drag the oil market into the conflict.”
Tehran said last week that it would retaliate following an Israeli air strike killed two of its generals and five military advisers in Damascus.
Factors supporting the rise in oil prices
At the same time, ANZ analysts said that broader fundamentals are supporting prices. Data on Monday showed that fuel demand in India hit a record high in fiscal year 2024, driven by higher consumption of gasoline and jet fuel.
The improvement in Chinese manufacturing activity announced last week is expected to boost fuel demand.
This week, the market will be watching inflation data from the United States and China for further signals regarding the economic direction of the world’s largest oil consumers.
The Mexican state oil company Pemex had said it would reduce crude oil exports by 330,000 barrels per day; So it can supply more to local refineries, reducing supplies available to the company’s buyers in the United States, Europe and Asia and supporting higher prices.
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