Apr 8 2024: Oil prices dipped on Monday following developments in the Middle East, where Israel withdrew more troops from Gaza and initiated discussions for a potential ceasefire.
By 10:00 GMT, Brent crude futures fell by 1% or 90 cents to $90.27 per barrel. Similarly, U.S. West Texas Intermediate crude dropped about 0.9%, down 86 cents to $86.05.
Last week, oil prices had surged by approximately 4% due to escalating geopolitical tensions in the region.
Israel’s recent actions include reducing its presence in southern Gaza, leaving only one brigade stationed there. The country has been gradually withdrawing troops since the beginning of the year to ease pressure on reservists. International pressure has also been mounting on Israel to address humanitarian concerns in Gaza.
Ceasefire discussions gained traction as both Israel and Hamas dispatched teams to Egypt for talks ahead of the Eid holidays. However, a Hamas official noted on Monday that no significant progress was made during the latest round of negotiations.
In addition to geopolitical developments, market analysts are monitoring economic indicators. The recent U.S. employment report indicated a robust end to the first quarter, potentially leading the Federal Reserve to delay interest rate cuts.
Investors are eagerly awaiting consumer price index data from both the U.S. and China this week. These figures will offer insights into possible Fed actions and provide a glimpse into the economic conditions of the world’s top oil consumers.
John Evans, a broker at PVM, mentioned that the current oil market lacks the physical support to push prices significantly beyond $90 to $100 per barrel. However, heightened geopolitical tensions and increased investor interest are preventing significant downward movements at present.
