LONDON: Oil futures climbed on Monday after
Saudi Arabia
hiked June
crude prices
for most regions and as the prospect of a
Gaza ceasefire
deal appeared slim, renewing fears the Israel-Hamas conflict could still widen in the key oil-producing region.
Brent crude futures
were up 77 cents, or 0.9%, to $83.73 a barrel at 1055 GMT, while U.S.
West Texas Intermediate
crude futures were at $78.98 a barrel, up 87 cents, or 1.1%.
Last week, both futures contracts posted their steepest weekly loss in three months, with Brent falling more than 7% and WTI down 6.8%, as investors weighed weak U.S. jobs data and the possible timing of a
Federal Reserve interest rate
cut.
The geopolitical risk premium in oil prices also eased as talks for a Gaza ceasefire were underway.
However, prospects for a deal faded as Hamas reiterated its demand for an end to the war in exchange for the freeing of hostages and Israel appeared poised to launch a long-threatened assault in the southern Gaza Strip.
On Monday, Israel’s military called on Palestinian civilians to evacuate Rafah as part of a “limited scope” operation.
“News that Israel wants to go ahead and extend its operation into Rafah risks derailing a potential ceasefire agreement and reigniting Middle Eastern
geopolitical tensions
which had appeared to be easing,” IG markets analyst Tony Sycamore said.
Also supporting oil was Saudi Arabia’s move to raise the official selling prices (OSPs) for its crude sold to Asia, Northwest Europe and the Mediterranean in June, signalling expectations of strong demand this summer.
In China, the world’s largest crude importer, services activity remained in expansionary territory for the 16th straight month, while growth in new orders accelerated and business sentiment rose solidly, boosting hopes of a sustained economic recovery.
