Oil stabilises after surging over 4% last week; brent crude at $91.01/bbl

The global oil benchmark Brent stabilized above $91 per barrel on Monday, paring back initial declines triggered by Israel’s withdrawal of additional troops from Gaza and its commitment to new discussions regarding a potential ceasefire in the Middle East conflict.

At 13:35 GMT, Brent crude futures showed a decrease of 16 cents, or 0.2%, standing at $91.01 per barrel. Meanwhile, U.S. West Texas Intermediate crude experienced a slight drop of 9 cents, approximately 0.1%, reaching $86.82. Earlier in the session, both benchmarks had seen losses exceeding $2.

Last week, oil prices surged by approximately 4% due to rising geopolitical tensions.

Also read: Oil prices report second straight weekly gain, hit 6-month high on Middle-East crisis; Brent at $91/bbl

“Crude oil exhibited significant volatility, extending its gains to reach a 5-1/2 month high amidst escalating tensions in the Middle East and constrained supply from OPEC+ nations. On Monday, both international oil benchmark prices experienced a decline of more than $1 per barrel. This was attributed to a reduction in Middle East tensions, following Israel’s withdrawal of additional troops from southern Gaza and their commitment to fresh discussions regarding a potential ceasefire in the ongoing six-month conflict. Also, the release of better-than-expected U.S. job data for March may further bolster demand for crude oil in the forthcoming months. Anticipating today’s session, we foresee crude oil prices to maintain their volatility. Support levels for crude oil stand at $84.05–83.40, with resistance observed at $85.10-85.70. In terms of INR, crude oil is expected to find support at ₹7,120-6,980 and resistance at ₹7,340-7,420,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

What’s weighing on crude oil prices?

• On Sunday, Israel announced further withdrawals of its troops from southern Gaza. This move is part of a gradual reduction in troop numbers initiated at the beginning of the year, aimed at easing the burden on reservists. Additionally, Israel faces mounting pressure from its allies to address the humanitarian challenges in Gaza.
• In the meantime, discussions on a ceasefire were reignited as both Israel and Hamas dispatched delegations to Egypt for negotiations preceding the Eid holidays. However, a Hamas representative stated on Monday that no advancements were achieved in the latest round of talks.

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• Amidst the variables influencing the demand projection for oil, the recent U.S. employment report released on Friday indicates a robust end to the first quarter for the economy. This development may lead to a potential delay in interest rate cuts by the Federal Reserve in the current year.
• This week, investors will closely examine the consumer price index data from both the U.S. and China to glean insights into the timing of potential Fed rate adjustments and to assess the economic well-being of the top two oil-consuming nations globally.