Apr 30 2024: Oil prices saw a slight increase on Tuesday after a previous decline, with talks between Israel and Hamas offering hope for a ceasefire despite ongoing attacks in the Red Sea. Investors were also focused on the upcoming Federal Reserve meeting to gauge signals on U.S. interest rates.
Brent crude futures for June, set to expire on Tuesday, rose by 26 cents to reach $88.67 per barrel at 1101 GMT. Meanwhile, the more active July contract increased by 38 cents to $87.58 per barrel.
U.S. West Texas Intermediate crude futures also edged up by 34 cents to $82.97 per barrel. Both benchmarks had experienced a decrease of more than 1% on Monday.
Analysts noted that the prospect of a ceasefire between Israel and Hamas initially contributed to the decline in oil prices at the beginning of the week. Additionally, reduced crude demand from refineries leading to higher inventory levels added pressure on prices.
Hamas negotiators left Cairo on Monday to consult with their leadership after talks with Qatari and Egyptian mediators regarding a proposed truce by Israel. Continued attacks by Yemen’s Houthis on maritime traffic near the Suez Canal have also influenced oil prices, as disruptions could impact crude supply.
Investors are closely monitoring the Federal Reserve’s policy review scheduled for May 1, particularly in light of persistent inflation. Expectations for any rate cuts have been pushed back due to resilient inflation and labor market conditions, potentially strengthening the U.S. dollar and affecting oil demand outlook.
Concerns over demand have further influenced sentiment, with premiums for diesel and heating oil over crude oil reaching their lowest levels in months, according to ANZ analysts.
