Oil prices rose in early Asian trading as optimism waned about the possibility of ceasefire discussions between Israel and Hamas to reduce Middle East tensions.
U.S. West Texas Intermediate (WTI) crude increased by 35 cents to $86.78 per barrel, while Brent crude futures increased by 40 cents to $90.78 per barrel.
A multi-session demonstration was called off on Monday following the completion of recent cease-fire negotiations between Israel and Hamas in Cairo. Due to the growing likelihood that geopolitical dangers would abate, Brent saw its first decrease in five sessions and WTI saw its first in seven.
On Monday, Israeli Prime Minister Benjamin Netanyahu declared that Israel would be entering the Gaza Strip’s Rafah pocket at an unspecified date.
Furthermore, a senior Hamas official declared on Monday that Hamas had turned down the most recent cease-fire offer made by Israel during the Cairo negotiations.
A day before, oil prices had fallen on expectations of a cease-fire agreement between the two Middle Eastern warring factions. There was some hope for a major decrease in the intensity of the fighting in light of the recent events, especially the ceasefire negotiations.
This was particularly noteworthy because the United States had urged Israel to curtail its offensive against Gaza because of worries about abuses of human rights.
In the meantime, expectations of lower oil supplies have also driven up the price of crude in recent weeks, and this tendency persisted.
With top producer Russia suggesting the possibility of additional production cuts, the Organisation of the Petroleum Exporting Countries and its allies, or OPEC+, reaffirmed this week their commitment to sustaining output cutbacks through the end of June.
Furthermore, strikes by the Ukrainians on the country’s oil infrastructure caused disruptions to Russia’s gasoline output, leading to the shutdown of several major refineries.
