(MENAFN) On Monday, oil rates experienced a decline amidst burgeoning hopes for a cease-fire in the Middle East and mounting uncertainties surrounding the timing of the US Federal Reserve's (Fed) interest rate adjustments.
The international benchmark Brent crude saw a decrease to USD87.45 per barrel at 10:45 a.m. local time (0745 GMT), marking a 0.86 percent downturn from the previous session's closing price of USD88.21 per barrel. Similarly, the American benchmark West Texas Intermediate (WTI) traded at USD83.11 per barrel at the same time, reflecting a 0.88 percent drop from the previous session's close at USD83.85 per barrel.
The prospects of a cease-fire in Gaza gained traction as US Secretary of State Antony Blinken embarked on discussions in Saudi Arabia regarding this potential development on Monday, prompting a decline in oil rates at the outset of the week.
Blinken's agenda includes deliberations on endeavors to secure a cease-fire in Gaza, with a focus on ensuring the release of hostages while addressing the challenges posed by the Palestinian resistance group. These discussions also encompass strategies for advancing towards the establishment of an independent Palestinian state, safeguarding Israel's security, fostering long-term peace and stability in the region, and augmenting humanitarian assistance for Gaza.
The anticipation of a cease-fire in the Middle East, an area pivotal to major oil trade routes, contributed to the downward trajectory in oil rates. Additionally, the lingering uncertainties surrounding the Fed's timeline for initiating interest rate adjustments continued to exert influence.
Market sentiments remain attuned to the awaited implementation of the US Fed's first interest rate cut, anticipated to materialize in the fourth quarter of the year, notwithstanding recent data releases in the US suggesting otherwise. The potential prospect of a rate cut further bolstered the downward movement in oil rates, as elevated interest rates typically elevate the value of the US dollar, thereby rendering oil comparatively more expensive for holders of other currencies.
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