Oil Prices Drops to $1 Amid Israel-Hamas Diplomacy Efforts to Minimize war

Oil prices fell more than $1 on Monday as concerns about supply interruptions abated amid diplomatic efforts to minimise the confrontation between Israel and the Palestinian Islamist party Hamas intensified.
Brent crude futures were down 67 cents to $91.49 a barrel as of 0628 GMT, after falling $1.08 to $91.08 a barrel earlier in the day. US West Texas Intermediate oil futures were down 82 cents at $87.26 a barrel, after falling $1.72 to $87.03 earlier in the session.
Last week, the futures rose more than 1% for the second week in a straight, owing to concerns about potential supply disruptions if the Israel-Hamas conflict escalates into a wider conflict in the Middle East, the world’s largest oil-supplying region.
Over the weekend, aid convoys began to arrive in Gaza from Egypt, as Arab presidents and foreign ministers assembled in Cairo for a summit that failed to produce a united statement.
“There is some relief in the oil market that Israel is holding off on a planned ground incursion of northern Gaza to negotiate a release of hostages, which opens up a window for diplomacy,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
“A ground siege is seen as a potential trigger for widening the Israel-Hamas conflict into the Middle East region, the factor behind crude’s risk premium over the past fortnight,” he added.
The same was also expressed by analysts at ANZ Research, who said in a client note that this gave them hope that the Israel-Hamas conflict would not expand throughout the Middle East and impair supplies.
However, in more recent events, Israel attacked Lebanon with its aircraft and pounded Gaza. Monday saw a decline in Asian stock prices.
The Organisation of the Petroleum Exporting Countries (OPEC) and its affiliates, notably Russia, have been cutting their output, which has put pressure on the oil supply already tight.
In response, the United States lifted its sanctions against OPEC member Venezuela following an agreement its government reached with the opposition.
Following his talks with Pope Francis and Israeli Prime Minister Benjamin Netanyahu, U.S. President Joe Biden, who travelled to Israel last week, made phone calls to the leaders of Canada, France, Britain, Germany, and Italy on Sunday.
This week, the leaders of France and the Netherlands will travel to Israel in an attempt to find a resolution to the crisis that began on October 7 following a Hamas strike.

Source:allnewsng.com

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