Tuesday’s early Asian trading saw an increase in oil prices as investors maintained their concern that the Israel-Hamas conflict could spread into a larger battle in the oil-exporting area, potentially disrupting supply. Brent crude prices had risen by 70 cents, or 0.8%, to $90.53 per barrel, while U.S. West Texas Intermediate crude futures had gained 71 cents, or 0.8%, to $86.20 per barrel.
The world’s largest oil-supplying region, the Middle East, increased diplomatic efforts on Monday to control the war between Israel and Hamas, allaying investor concerns about supply interruptions and causing both benchmarks to decline by more than 2%. On Monday, Hamas claimed to have liberated two Israeli women who were among the more than 200 captives it had captured during its Oct. 7 rampage in southern Israel.
Meanwhile, according to sources, the U.S. had reportedly instructed Israel to hold off on launching a direct invasion into the Gaza Strip. Israeli airstrikes over southern Lebanon overnight prompted Israel to continue its bombing of Gaza on Monday. “We expect WTI to move within the $80-$90 range for a while,” Takashima said, adding that investors were also paying attention to U.S. inventory data.
“All eyes are on the situation in Israel and Gaza, OPEC production and the pace of demand recovery in China.” An early Monday Reuters poll indicated that while distillate and petrol inventories were projected to have decreased last week, U.S. crude stockpiles were expected to have increased.
