Oil prices rose during Tuesday's trading after Israel bombed the city of Rafah in Gaza, while negotiations over a ceasefire with Hamas continued without reaching an agreement.
price movement
Brent crude futures were up 23 cents, or 0.28 percent, at $83.56 a barrel by 0400 GMT. U.S. West Texas Intermediate (WTI) crude futures were up 24 cents, or 0.31 percent, at $78.72 a barrel.
Oil prices opened higher this morning as some hiccups in ceasefire talks between Israel and Hamas prompted market participants to price in the impact of geopolitical tensions that are likely to persist for a longer period, said Ye Jun Rong, market strategist at IG.
Yep added that market participants are awaiting new data on US crude inventories.
A preliminary Reuters poll on Monday showed U.S. crude and product inventories fell last week. Crude inventories could fall by an average of about 1.2 million barrels in the week to May 3, according to analysts’ expectations.
Oil prices settled higher on Monday, partly recouping last week’s losses. Both contracts posted their biggest weekly losses in three months as the market focused on weak U.S. jobs data and the potential timing of a U.S. interest rate cut.
Hamas agreed on Monday to a ceasefire proposal in Gaza from Egypt and Qatar, but Israel said the terms did not meet its demands and went ahead with the Rafah attack as it plans to continue negotiations on a deal.
Israeli forces bombed Rafah, located on the southern tip of the Gaza Strip, by air and land and ordered residents to leave parts of the city where more than a million displaced Palestinians have taken refuge.
Oil prices were supported as no end to the seven-month-old war was declared, with investors concerned that a regional escalation of the conflict could disrupt crude supplies in the Middle East.
Saudi Arabia's move to raise official selling prices for its crude sold to Asia, northwest Europe and the Mediterranean in June also supported prices, pointing to expectations of strong demand this summer.
Meanwhile, a stronger dollar limited gains in oil futures as it makes crude more expensive for holders of other currencies. The dollar index, which measures the greenback against six major currencies, rose to 105.18 points by 0400 GMT.
