Oil rates decline driven by potential ceasefire in Gaza
(MENAFN) On Monday, oil prices experienced a decline after four consecutive weeks of gains, prompted by the potential for a ceasefire in Gaza, which has contributed to easing geopolitical tensions in the Middle East. This development has come at a time when investors are also evaluating the potential disruption to U.S. energy supplies due to Tropical Storm Beryl, as reported by a UK-based news agency.
As of 0234 GMT, futures for brent crude oil saw a decrease of 12 cents, equating to a 0.1 percent drop, bringing the price to USD86.42 per barrel. Similarly, U.S. West Texas Intermediate (WTI) crude fell by 28 cents, or 0.3 percent, to reach USD82.88 per barrel.
Tony Sycamore, an analyst at IG, commented on the situation, stating, "If anything concrete comes out of the Gaza ceasefire talks, it will take some of the geopolitics out of the market for now." This implies that a successful ceasefire could reduce some of the geopolitical risks currently factored into the oil market.
In anticipation of Tropical Storm Beryl, the ports of Corpus Christi, Houston, Galveston, Freeport, and Texas City were closed on Sunday. The storm has the potential to develop into a Category 2 hurricane once it makes landfall on the central Texas coast, specifically between Galveston and Corpus Christi, later on Monday. These port closures are significant as they could temporarily halt the export of crude oil and liquefied natural gas, disrupt oil shipments to refineries, and delay the delivery of motor fuel from these facilities.
Additionally, oil prices received support last week from the anticipation of interest rate cuts. This optimism followed the release of U.S. economic data on Friday, which showed a decline in inflation and a slowdown in job growth. According to Sycamore, lower interest rates have the potential to boost economic activity, which in turn could increase the demand for crude oil.
Overall, the combination of geopolitical developments, weather-related disruptions, and economic factors is influencing the oil market, leading to fluctuations in prices as investors react to the latest news and data.
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