Oil falls 1% as Israel and Hamas begin fresh ceasefire talks

Brent futures fall 1.2%, WTI down 1%

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A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia. — Reuters file

By Reuters

Published: Mon 8 Apr 2024, 10:06 PM

Oil prices fell over a dollar a barrel on Monday after Israel reduced its troops in southern Gaza and began a fresh round of ceasefire talks with Hamas.

Brent crude futures fell $1.07, or 1.2 per cent, to $90.10 a barrel by 1:26pm ET. US West Texas Intermediate crude was down 85 cents, or 1 per cent , at $86.06.

Both benchmarks fell more than $2 earlier in the session, with investors focusing on Israel’s decision to withdraw more soldiers from southern Gaza on Sunday.

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“The Sunday Israel announcement (withdrawing its ground forces part of the Gaza strip) has reduced somewhat the geopolitical risk premium,” UBS analyst Giovanni Staunovo said.

A Hamas official said on Monday that the talks with Israel remain deadlocked, although an Israeli minister earlier described the talks as the closest the sides have come to a deal since November.

Also weighing on oil prices were expectations that US crude oil stocks likely rose last week, Staunovo said.

However, the decline in oil prices should be modest until it becomes clear how Iran will respond to the bombing of its consulate in Syria last week, he added.

The bombing, for which Tehran has said it will take revenge, heightened concerns that the Middle East conflict could broaden and have tangible impacts to oil supplies. That contributed to a four per cent jump in crude benchmarks last week, with Brent futures rising for the fourth consecutive week — the longest rally since August last year.

Among the factors affecting oil’s demand outlook, a US employment report on Friday suggested the economy ended the first quarter on solid ground, which could prompt the Federal Reserve to delay interest rate cuts this year.

Investors will be scouring consumer price index data from the US and China this week for further clues on the timing of possible Fed rate cuts and to gauge the economic health of the world’s top two oil consumers.

Reuters

Published: Mon 8 Apr 2024, 10:06 PM

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