With little chance of a Gaza ceasefire agreement, and concerns that the Israel-Hamas conflict may yet escalate in the crucial oil-producing region, oil futures increased on Monday. Saudi Arabia had raised the price of June crude for the majority of its territories.
US West Texas Intermediate crude futures were up 29 cents, or 0.4%, to $78.40 a barrel, while Brent crude futures increased 28 cents, or 0.3%, to $83.24 a barrel.
In June, Saudi Arabia increased the official selling prices (OSPs) for the crude it shipped to the Mediterranean, Northwest Europe, and Asia, indicating that it anticipated robust demand this summer.
Due to investors’ concerns over the timing of a potential Federal Reserve interest rate decrease and the weakness of US jobs statistics, both futures contracts saw their sharpest weekly losses in three months last week, with Brent falling more than 7% and WTI down 6.8% .
As negotiations for a ceasefire in Gaza continue, the premium for geopolitical risk in oil prices has decreased as well.
However, Hamas reaffirmed its demand for an end to the war in exchange for the release of captives, and Israeli Prime Minister Benjamin Netanyahu categorically rejected that, making the chances of a deal appear remote on Sunday.
US energy companies reduced the number of oil and natural gas rigs operating for a second week in a straight last week, with oil rigs down seven to 499, in the greatest weekly reduction since November 2023, according to a report released by Baker Hughes on Friday . This could be an indication that supplies may be tightening.
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