Oil prices climb on stalled Gaza ceasefire talks

9 Feb 2024 , 09:34 AM

Early on Friday morning, oil prices increased, continuing their weekly upward trend. Tensions in the Middle East remain high following Israel’s rejection of Hamas’ offer of a truce.

U.S. West Texas Intermediate crude futures increased by 17 cents, or 0.2%, to $76.39 a barrel, while Brent futures increased by 8 cents, or 0.1%, to $81.71 a barrel.

The previous session saw an approximate 3% increase in oil prices. On Thursday, Israeli forces attacked Rafah, a city bordering the south, following Prime Minister Benjamin Netanyahu’s rejection of a plan to resolve the conflict in the Palestinian enclave.

Oil prices have remained high because to the tensions; this week, WTI and Brent are both expected to rise 5.7%.

As Israel shifted the emphasis of its attack to Rafah, U.S. officials delivered their sharpest critique of the civilian deaths in Gaza to date.

On Thursday, a Hamas delegation travelled to Cairo to have negotiations with Egypt and Qatar, the mediators, regarding a ceasefire.

Although the fighting has supported prices, oil output has remained unaffected.

But due to the turmoil in Ukraine, as well as technical difficulties and drone strikes on Russian refineries, the nation is exporting more petroleum than it had intended in February. This might jeopardise its promise to reduce sales as part of an OPEC+ agreement.

In the agreement with allies and the Organisation of the Petroleum Exporting Countries, or OPEC+, Russia pledged to limit the amount of crude oil produced to 9.5 million barrels per day (bpd). Additionally, it is deliberately reducing fuel and crude exports from their usual May–June level by 200,000 and 300,000 barrels, respectively.

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