This comes on a day when the US Department of Energy (DOE) announced the signing of a contract to purchase 4.65 million barrels of crude oil for the Strategic Petroleum Reserve, to be delivered to the Bayou Choctaw site in Louisiana during the last three months of the year.
The prices of the Petroleum fell more than a dollar a barrel on Monday, after Israeli officials said they wanted to avoid dragging the Middle East into an all-out war. as they responded to a deadly rocket attack in the Israeli-occupied Golan Heights over the weekend.
Crude oil futures Brent U.S. crude futures fell $1.35, or 1.7%, to $79.78 a barrel. West Texas Intermediate (WTI) fell $1.35, or 1.8%, to $75.81.
Two Israeli officials said on Monday that Israel wanted to harm the Iranian-backed Lebanese group Hezbollah and which the country blames for Saturday’s attack that killed 12 children and teenagers but did not spark a region-wide conflict.
“This implies that a ceasefire in Gaza may not be far in the future.”said Bob Yawger, director of energy futures at Mizuho in New York.
On Sunday, the Israeli security cabinet authorized the government of Prime Minister Benjamin Netanyahu to decide the “manner and timing” of responding to an attack on a sports field.
Israel vows to retaliate against Hezbollah in Lebanonbacked by Iran, which denied responsibility for the attack. On Sunday, Israeli aircraft attacked targets in southern Lebanon.
The tensions raised concerns among investors about the possible impact on crude oil production in the world’s largest oil producing regionbut pumping has not been affected so far.
The Brent and WTI benchmarks lost 1.8% and 3.7% last weekrespectively, due to falling Chinese demand and hopes for a ceasefire agreement in Gaza.
Data released this month showed that China’s total fuel oil imports fell 11% in the first half of 2024, raising concerns about the demand outlook in the world’s largest crude importer.
Prices also fell on Friday after it became known that Nigeria’s massive Dangote oil refinery is reselling cargoes of US crude and Nigerian after experiencing technical problems at the plant.
Meanwhile, markets are keeping an eye on the oil producer Venezuela after the country’s electoral authority said that President Nicolás Maduro won a third term with 51% of the votes despite multiple exit polls pointing to an opposition victory.
The United States had previously said it would “calibrate” its sanctions policy toward Venezuela depending on how the elections develop in the OPEC member country.
Source: Ambito
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