Oil futures are higher on Monday after Saudi Arabia raised crude prices in June for most regions and as the prospect of a ceasefire agreement for Gaza appears increasingly weak, renewing fears that the Israel-Hamas conflict could further expand in the region’s main oil-producing countries.
Brent crude futures gained 73 cents, or 0.9%, to $83.69 a barrel by 8.52am GMT, while U.S. West Texas Intermediate crude futures were at $78.95 a barrel, up $84. cents, or 1.1%, it reports Reuters.
Last week, both futures contracts posted their steepest weekly losses in three months, with Brent falling more than 7% and WTI falling 6.8%, as investors weighed weak jobs data in the United States and the possible timing of a Federal Reserve interest rate cut.
The geopolitical risk premium on oil prices also eased as ceasefire talks in Gaza were underway.
However, prospects for a deal dimmed as Hamas reiterated its demand to end the war in exchange for the release of hostages and Israel appeared poised to launch a long-threatened assault on the southern Gaza Strip.
The Israeli army called on Palestinian civilians to evacuate Rafah on Monday as part of a “limited scope” operation.
Also supporting oil was Saudi Arabia’s move to raise official selling prices, OSPs, for crude sold in Asia, northwestern Europe and the Mediterranean in June, signaling expectations of strong demand this summer.
This comes after Saudi Arabia increased June PSOs for most regions amid reduced supplies this quarter, it added.
In China, the world’s largest crude oil importer, services activity remained in expansionary territory for the 16th consecutive month, while growth in new orders accelerated and business sentiment rose solidly, raising hopes of a sustained economic recovery.
Luigi Medici
