By Florence Tan
SINGAPORE (Reuters) – Oil futures edged up on Monday after Saudi Arabia hiked June crude costs for many areas and because the prospect of a Gaza ceasefire deal appeared slim, renewing fears the Israel-Hamas battle may nonetheless widen in the important thing oil producing area.
futures climbed 28 cents, or 0.3%, to $83.24 a barrel at 0119 GMT, whereas U.S. West Texas Intermediate crude futures had been at $78.40 a barrel, up 29 cents, or 0.4%.
Saudi Arabia raised the official promoting costs (OSPs) for its crude bought to Asia, Northwest Europe and the Mediterranean in June, signalling expectations of sturdy demand this summer time.
“After falling a bit of greater than 7.3% final week as a consequence of easing geopolitical tensions, ICE Brent has began the brand new buying and selling week on a stronger footing, opening larger,” ING’s head of commodities analysis Warren Patterson mentioned in a word.
This comes after Saudi Arabia raised June OSPs for many areas amid a tightening of provides this quarter, he added.
Final week, each futures contracts posted their steepest weekly loss in three months with Brent falling greater than 7% and WTI down 6.8%, as buyers weighed weak U.S. jobs information and the potential timing of a Federal Reserve rate of interest minimize.
The geopolitical threat premium in oil costs has additionally eased as talks for a Gaza ceasefire are underway.
Nonetheless, prospects for a deal appeared slim on Sunday as Hamas reiterated its demand for an finish to the conflict in trade for the releasing of hostages, and Israeli Prime Minister Benjamin Netanyahu flatly dominated that out.
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In an indication provide could tighten, U.S. vitality corporations minimize the variety of oil and rigs working for a second week in a row final week, with oil rigs down seven to 499, within the greatest weekly drop since November 2023, Baker Hughes mentioned in a report on Friday.