Oil Prices Surge as Middle East Tensions Flare Up Again

9 Apr 2024 , 09:48 AM

Early Asian trade saw an increase in oil prices as expectations that talks between Israel and Hamas would result in a truce in Gaza and reduce tension in the Middle East waned.

Brent crude futures had increased by 40 cents to $90.78 per barrel. At $86.78, U.S. West Texas Intermediate (WTI) crude saw a 35-cent increase.

Monday saw a multi-session surge come to an end with a new round of Israel-Hamas peace talks in Cairo. This gave rise to the possibility that geopolitical risks could lessen, which caused Brent to decrease for the first time in five sessions and WTI to decline for the first time in seven.

According to a senior Hamas official, Hamas rejected the most recent Israeli ceasefire plan offered during the Cairo talks on Monday.

Although Israel has not claimed responsibility for the incident, Tehran declared last week that it will exact revenge following an airstrike that killed two of its generals and five military advisors in Damascus.

The market will be observing this week’s inflation data that is expected from China and the United States to get additional clues about the economic trajectory of the two biggest oil consumers in the world.

Pemex, the state oil firm of Mexico, announced that it would lower its crude exports by 330,000 barrels per day in the Americas to increase its supply to local refineries. This would result in a one-third reduction in the amount of crude available to Pemex’s buyers in the United States, Europe, and Asia.

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