Oil Prices Rise on Israel’s Rejection of Ceasefire Offer from Hamas
Oil Prices Extend Gains After Israel Rejects Ceasefire Offer
Oil prices continued to rise on Thursday after Israel rejected a ceasefire offer from Hamas, further escalating tensions in the region. This rejection, coupled with a weaker dollar, provided support to oil prices.
Oil Futures and Middle East Tensions
Oil futures saw an increase, with Brent crude rising by 0.4% to $79.51 a barrel and U.S. West Texas Intermediate crude climbing by 0.4% to $74.12 a barrel. The ongoing tensions in the Middle East, particularly the Gaza conflict, have contributed to the market’s volatility, with limited progress in peace talks.
Israel’s Rejection and Room for Negotiation
Israeli Prime Minister Benjamin Netanyahu rejected Hamas’ latest ceasefire offer, while U.S. Secretary of State Antony Blinken expressed the possibility of further negotiations towards an agreement. This development has kept the market on edge, with both parties showing willingness to engage in discussions.
Efforts for Ceasefire Talks
A Palestinian Hamas delegation, led by senior official Khalil Al-Hayya, is scheduled to travel to Cairo for ceasefire talks with Egypt and Qatar. These discussions aim to address the ongoing conflict and work towards a peaceful resolution in the region.
Weaker Dollar and Oil Prices
Oil prices were also supported by a weaker dollar, making crude less expensive for traders holding other currencies. The dollar, measured against six major peers, fell to 103.99, contributing to the favorable conditions for oil trading.
Drawdown in U.S. Gasoline and Distillate Stocks
On the demand side, there was a stronger-than-expected drawdown in U.S. gasoline and middle distillate stocks, further boosting the oil market. Distillate stockpiles fell by 3.2 million barrels to 127.6 million barrels, while gasoline stocks decreased by 3.15 million barrels.
Refinery Margins and Crude Demand
U.S. refinery margins continued to strengthen, which is expected to drive stronger crude demand as refineries aim to increase run rates and capitalize on stronger margins. This is a positive indicator for the overall demand for crude in the market.
U.S. Oil Exports and Market Trends
The drop in gasoline stocks and a 13% year-on-year rise in U.S. oil exports to a record 4.06 million barrels per day in 2023 indicate a stronger demand for crude. These market trends are significant factors contributing to the current state of the oil industry.
