Oil Rises as Israel Rejects Ceasefire
The global oil market rallied early Thursday following Israel’s rejection of a ceasefire offer from Hamas and resuming attacks on the Gaza Strip. The oil market has been under pressure lately with disruptions including tensions at the Red Sea.
Analysts noted that a weaker US dollar and build-up in US crude oil stocks could limit further price rises. Brent price rose 48 basis points to $79.59 per barrel.
The American benchmark, West Texas Intermediate (WTI), traded at the same time at $74.19 per barrel, up 0.45% from Wednesday’s close of $73.86 per barrel.
Oil prices spiked after Prime Minister Benjamin Netanyahu vowed to continue attacks on the Gaza Strip until achieving a ‘crushing victory’ against Hamas.
‘Giving in to the outrageous demands of Hamas will not only fail to bring about the release of the hostages but will also invite an additional massacre and a disaster for Israel,’ Netanyahu said at a news conference.
‘We are on the way to complete victory. The victory is within reach,’ he said. ‘We will continue until the end.” Netanyahu’s statements came shortly after talks with US Secretary of State Antony Blinken on a proposed cease-fire in Gaza.
The US, Qatar and Egypt, the key mediators between Hamas and Israel, confirmed they received a response from the Palestinian group to a framework agreement for a cease-fire and hostage-prisoner swap with Israel.
The increased likelihood of the continuation of the conflict between Palestine and Israel triggered fears of supply interruptions, putting upward pressure on oil prices.
Meanwhile, the falling value of the US dollar also supported dollar-indexed oil prices, with the greenback falling 0.03% to 103.887 on Thursday.
If the dollar depreciates against other currencies, dollar-indexed crude oil becomes cheaper for holders of other currencies and exerts upward pressure on prices.
However, data released by the Energy Information Administration (EIA) on Wednesday suggested an increase in US commercial crude oil inventories, limiting further price increases.
US inventories rose by around 5.5 million barrels to 427.4 million barrels, compared to the market expectation of an increase of around 674,000 barrels EIA weekly inventory numbers show that US commercial crude oil inventories increased by 5.52m barrels over the last week, which was above market expectations.
This build was driven by a rebound in crude oil imports, which increased by 1.3m b/d week on week, while exports also fell by 298k b/d week on week.
EIA numbers also showed a 300k b/d increase in crude production. The refined product numbers were more constructive. Gasoline inventories fell by 3.15m barrels over the week, while distillate stocks fell by 3.22m barrels. #Oil Rises as Israel Rejects Ceasefire#
