ISLAMABAD: Crude oil prices climbed on Tuesday after hopes faded that negotiations between Israel and Hamas would produce a ceasefire in Gaza. Brent, the international benchmark for two-thirds of the world’s oil, gained $0.18 (+0.20 percent) to reach $90.56 a barrel. Similarly, the West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $0.05 (+0.06 percent) to $86.48 a barrel. On the other hand, the price of Arab Light increased by $0.57 (+0.63 percent) to reach $91.46 a barrel. Similarly, the price of Russian Sokol increased by $0.51 (+0.62 percent) to $83.05 a barrel. On the other hand, the price for Opec Basket increased by $1.54 (1.72 percent) to $91.12 a barrel. Those hopes faded after Israeli Prime Minister Benjamin Netanyahu said a date had been set for Israel’s invasion of the Rafah enclave in Gaza. The continuation of the conflict keeps alive the risk that other countries could be drawn in, especially Iran which is a major Hamas backer and the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC). Geopolitical tensions in the Middle East, along with concerns over tightening supplies in the crude market, drove oil prices about 4 percent higher last week, with Brent breaching the $90 level. Both Brent and WTI reached their highest levels since October last week on traders’ concerns about the possibility of retaliation by Tehran following an Israeli attack on its embassy in Damascus on April 1. Markets in the Arab world are closed this week as the region marks the Eid Al Fitr holidays this week. Investors are also tracking consumer price index data expected to be released this week by the US and China, the world’s two largest economies and biggest consumers of crude. TLTP
The data may provide some hints on when the US Federal Reserve will start cutting interest rates, following a strong jobs report released last week.
Crude prices have also been supported by Russian refinery disruptions following Ukrainian attacks. Last Tuesday, Ukraine said a drone struck Russian oil company Tatneft’s Taneco refinery, which has a processing capacity of more than 17 million tonnes.
Oil producers’ group Opec+, meanwhile, made no policy changes following an online meeting last Wednesday, implying that voluntary output cuts of 2.2 million barrels per day would remain in place until the end of June. The group reiterated the need for countries that are producing above their quotas to scale back and compensate for the excess output.
