Feb 8, 2024: Oil prices continued to rise on Thursday as Israel rejected a ceasefire proposal from Hamas, while a decline in the value of the dollar also contributed to the upward momentum.
At 0400 GMT, Brent crude futures increased by 30 cents, or 0.4%, reaching $79.51 a barrel, while U.S. West Texas Intermediate crude futures climbed by 26 cents, or 0.4%, to $74.12 a barrel.
Tensions in the broader Middle East region have kept the oil market on edge since October, with minimal advancements in negotiations aimed at resolving the conflict in Gaza.
Israeli Prime Minister Benjamin Netanyahu dismissed Hamas’ latest ceasefire offer and the return of hostages held in the Gaza Strip. However, U.S. Secretary of State Antony Blinken indicated that there was still room for negotiations to reach an agreement.
A Palestinian Hamas delegation, led by senior official Khalil Al-Hayya, is scheduled to travel to Cairo on Thursday for ceasefire discussions with representatives from Egypt and Qatar.
Additionally, the weakening dollar provided support to oil prices by making crude less expensive for traders holding other currencies.
The dollar index, which measures the greenback against six major peers, fell to 103.99 at 0400 GMT.
On the demand side, oil prices were further bolstered by a stronger-than-expected decline in U.S. gasoline and middle distillate inventories.
According to Energy Information Administration data, distillate stockpiles fell by 3.2 million barrels to 127.6 million barrels, surpassing expectations for a 1 million-barrel decrease. Gasoline stocks also dropped by 3.15 million barrels, compared to analysts’ forecasts of a 140,000-barrel increase.
The decline in gasoline inventories, coupled with a 13% year-on-year increase in U.S. oil exports to a record 4.06 million barrels per day in 2023, suggests robust demand for crude oil, according to ANZ Research.