Following a reduction in Middle East hostilities, crude oil prices decline. Israel’s announcement that it has “concluded” its operations on Gaza eased concerns about geopolitical tension. A declining US dollar, meanwhile, promoted the oil trade and prevented further price declines.
Following a 0.41% price fall from Friday’s closing price of $82.19 per barrel, Brent traded at $81.85 per barrel today. West Texas Intermediate (WTI), the benchmark for the United States, was sold for $76.52 a barrel, 0.41% less than it closed at $76.84 on Friday.
As Brent crossed the $80 mark per barrel mark last week, there was less chance of an Israeli-Hamas cease-fire. However, news that Israel had carried out a “series of strikes” pushed oil markets into the week with a pessimistic outlook.
Risks remain high for ships travelling through the Red Sea, though, and this is contributing to oil price increases. On Saturday, the Houthi organization in Yemen threatened to expand its activities against Israel if it escalated the conflict in Rafah, in the southern Gaza Strip.
The US, meanwhile, carried out ‘self-defence strikes’ against Houthi targets in Yemen on Saturday, the US Central Command announced on Sunday.
Further fanning price increases, the US dollar has weakened, making dollar-indexed crude cheaper for other currency-holding traders.
Investors are awaiting the release of US inflation data due on Tuesday, the US inventory data forecast by the American Petroleum Institute late Tuesday, and the US Energy Information Administration’s actual data on Wednesday.
