The intensifying efforts to mediate a ceasefire between Israel and Hamas moderated geopolitical tensions and contributed to Monday’s weak oil opening. Markets are also awaiting the US Federal Reserve’s monetary policy review on May 1.
Crude oil futures Brent They fell 1.2% to $87.18 a barrel. The futures of West Texas Intermediate (WTI) They fell 1.4%, to $87.18 a barrel.
Israel’s foreign minister said Saturday that a planned raid on Rafah, where more than a million displaced Palestinians are sheltered, could be postponed if a deal is reached involving the release of Israeli hostages.
A White House spokesman said: Israel had agreed to listen to US concerns on the humanitarian effects of the possible invasion.
“They also influence nerves ahead of this week’s meeting of the Federal Open Market Committee, which is expected to have a tougher tone” Sycamore said. U.S. inflation rose 2.7% in the 12 months through March, according to data on Friday, above the Federal Reserve’s 2% target.
A lower inflation would have increased the likelihood of interest rate cuts, which would stimulate economic growth and oil demand.
According to Tina Teng, an independent market analyst, “persistent US inflation raises fears of higher interest rates for longer”, which translates into a strengthening of the dollar and puts pressure on commodity prices.
The dollar strengthened on the prospect of higher long-term interest rates. A stronger dollar makes oil more expensive for holders of other currencies.
Besides, Chinese industry profit growth slowed in Marchofficial data showed on Saturday, in the latest sign of fragile domestic demand in the world’s second-largest economy.
The accumulated benefits of the Chinese industrial companies rose 4.3% to 1.5 trillion yuan ($207 billion) in the first quarter compared to the previous year, compared to the 10.2% increase recorded in the first two months. But oil prices could rise again if US inventory data and China’s PMI index show improvements this week, Teng said.
Brent rose 49 cents and WTI 28 cents on Friday, following concerns about supply disruptions caused by events in the Middle East.
The market left aside the possible supply disruptions arising from Ukrainian drone attacks on Ilsky and Slavyansk oil refineries, in Russia’s Krasnodar region, over the weekend. The Slavyansk refinery had to suspend some operations after the attack, a plant executive said.
Source: Ambito
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