ISLAMABAD
Crude oil prices fell on Monday after Israel withdrew some soldiers from Gaza amid renewed ceasefire talks, defusing some tension in the Middle East ahead of the Eid Al Fitr holiday.
Brent, the international benchmark for two-thirds of the world’s oil, shed $0.69 (-0.76 percent) to reach $90.48 a barrel. Similarly, the West Texas Intermediate (WTI), the main oil benchmark for North America, went down by $0.59 (-0.68 percent) to $86.32 a barrel.
On the other hand, the price of Arab Light decreased by $1.09 (-1.19 percent) to reach $90.89 a barrel. Similarly, the price of Russian Sokol decreased by $1.37 (-1.63 percent) to $82.54 a barrel. On the other hand, the price for Opec Basket remained unchanged at $89.58 a barrel.
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.
Most Israeli soldiers have withdrawn from southern Gaza following the departure of an army division from Khan Younis, Israeli media reported on Sunday as truce talks resumed in Cairo. Progress has reportedly been made in discussions for a ceasefire, with all parties having agreed on basic points.
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. 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.
