Oil prices rose on Monday as geopolitical tensions in the Middle East escalated with Israel’s continued occupation of the Gaza Strip and Saudi Arabia announced a crude oil price hike for next June.
Developments in the Gaza Strip, particularly possible Israeli military maneuvers in Rafah, in addition to Saudi Arabia’s pricing decisions, have injected more uncertainty into global oil markets, according to Reuters.
Brent crude rose to around $84 a barrel, falling a few cents, recovering from its biggest weekly loss since last February, according to Bloomberg.
According to Bloomberg, Saudi Aramco’s decision to raise sales prices to Asia next June for all grades, particularly its key Arab Light grade, indicates confidence in market expectations.
“Crude oil is trading higher due to renewed concerns in the Middle East, adding some premium to prices and suggesting strong demand after Saudi Arabia raised prices to Asia,” Ole Hansen, head of commodity strategy at Saxo Bank, told Bloomberg. .
Reuters reported similar sentiments, with oil futures higher as Saudi Arabia’s hike in crude prices in most regions coincided with rising tensions in Gaza.
Brent crude rose 0.84% to $83.65 a barrel, while US West Texas Intermediate crude futures rose to $78.89 a barrel.
Chances of reaching a quick cease-fire deal in Gaza appeared slim, reviving fears that the war would escalate.
John Gilduff, partner at Again Capital, told Bloomberg of market sentiment, “The markets are a little stressed about the geopolitical risks from the war, and I think we need to do more to move the markets.”
Despite ongoing talks between the Islamist movement Hamas and Israel, a lack of agreement over the weekend dampened market reactions.
