Oil slips as diplomats try to contain Middle East conflict
Oil loses more than $1 amid diplomatic efforts to contain the conflict between Israel and Hamas
23 October 2023 - 07:45
byMohi Narayan
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
New Delhi — Oil prices slid more than $1 on Monday as diplomatic efforts grew at the weekend to contain the conflict between Israel and the Palestinian Islamist group Hamas, though Gaza continued to be bombarded.
Brent crude futures fell 79c to $91.37 a barrel, at 4.10am GMT, having lost $1.02 to $91.14 a barrel earlier in the session. US West Texas Intermediate crude futures were down 91c at $87.17 a barrel, after sliding $1.72 to $87.03 a barrel earlier on Monday.
The contracts had risen more than 1% last week for a second consecutive weekly jump on fear of potential supply disruption if the Israel-Hamas war grows into a wider confrontation in the Middle East, the world’s biggest oil-supplying region.
Aid convoys started to arrive in the Gaza Strip from Egypt at the weekend, as Arab leaders and foreign ministers gathered for a summit in Cairo that was unable to yield a joint statement.
“There is some relief in the oil market that Israel is holding off on a planned ground incursion of northern Gaza to negotiate a release of hostages, which opens up a window for diplomacy,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
“A ground siege is seen as a potential trigger for widening the Israel-Hamas conflict into the Middle East region, the factor behind crude’s risk premium over the past fortnight,” Hari said.
Analysts at ANZ Research echoed the sentiment, adding in a client note this provided hope that the Israel-Hamas war would not spread across the Middle East and disrupt supplies.
But, in the latest developments, Israel bombarded Gaza and its aircraft struck Lebanon. Asian shares drifted lower on Monday.
To ease oil supply pressure — already tight due to output cuts by oil cartel Opec and affiliates including Russia — the US suspended sanctions on Opec member Venezuela after a Venezuelan government deal with the opposition.
US President Joe Biden, who visited Israel last week, had calls on Sunday with the leaders of Canada, France, Britain, Germany and Italy, after speaking with Israeli Prime Minister Benjamin Netanyahu and Pope Francis.
Leaders of France and the Netherlands will visit Israel this week in search of a solution for the conflict which ignited on October 7 after a Hamas attack.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil slips as diplomats try to contain Middle East conflict
Oil loses more than $1 amid diplomatic efforts to contain the conflict between Israel and Hamas
New Delhi — Oil prices slid more than $1 on Monday as diplomatic efforts grew at the weekend to contain the conflict between Israel and the Palestinian Islamist group Hamas, though Gaza continued to be bombarded.
Brent crude futures fell 79c to $91.37 a barrel, at 4.10am GMT, having lost $1.02 to $91.14 a barrel earlier in the session. US West Texas Intermediate crude futures were down 91c at $87.17 a barrel, after sliding $1.72 to $87.03 a barrel earlier on Monday.
The contracts had risen more than 1% last week for a second consecutive weekly jump on fear of potential supply disruption if the Israel-Hamas war grows into a wider confrontation in the Middle East, the world’s biggest oil-supplying region.
Aid convoys started to arrive in the Gaza Strip from Egypt at the weekend, as Arab leaders and foreign ministers gathered for a summit in Cairo that was unable to yield a joint statement.
“There is some relief in the oil market that Israel is holding off on a planned ground incursion of northern Gaza to negotiate a release of hostages, which opens up a window for diplomacy,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
“A ground siege is seen as a potential trigger for widening the Israel-Hamas conflict into the Middle East region, the factor behind crude’s risk premium over the past fortnight,” Hari said.
Analysts at ANZ Research echoed the sentiment, adding in a client note this provided hope that the Israel-Hamas war would not spread across the Middle East and disrupt supplies.
But, in the latest developments, Israel bombarded Gaza and its aircraft struck Lebanon. Asian shares drifted lower on Monday.
To ease oil supply pressure — already tight due to output cuts by oil cartel Opec and affiliates including Russia — the US suspended sanctions on Opec member Venezuela after a Venezuelan government deal with the opposition.
US President Joe Biden, who visited Israel last week, had calls on Sunday with the leaders of Canada, France, Britain, Germany and Italy, after speaking with Israeli Prime Minister Benjamin Netanyahu and Pope Francis.
Leaders of France and the Netherlands will visit Israel this week in search of a solution for the conflict which ignited on October 7 after a Hamas attack.
Reuters
MARKET WRAP: JSE weaker amid rising US Treasury yields
WATCH: Market Report
JSE slips as investors eye rising US treasury yields
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Asian shares slump to one-year lows
Global stocks fall as tensions in the Middle East increase
Oil heads higher on Middle East concerns
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.