Oil prices fell on Monday after Israel said it had “ended” a series of strikes in southern Gaza, slightly easing supply concerns in the Middle East.
Brent crude futures were down 0.27 USD, or 0.33%, at 81.92 USD per barrel, while US West Texas Intermediate (WTI) futures were down 0.29 USD, or 0.38%, at 76.55 USD per barrel.
Geopolitical risks, including fears of a widening conflict in the Middle East and potential supply disruptions, pushed prices up about 6% last week. Israel’s military said on Monday it had ended a “series of strikes” in southern Gaza, days after Israeli Prime Minister Benjamin Netanyahu rejected a cease-fire offer by Hamas.
While supply concerns in the Middle East remain relatively strong, news from the US has quelled some concerns. The number of operating oil and natural gas rigs by US energy firms rose to its highest level since mid-December, potentially signaling a rise in output. Separately, output last week rebounded to a record 13.3 million barrels per day.
Demand concerns remain after another Federal Reserve official said he is not recommending an easing of monetary policy, emphasizing the fact that the central bank has not yet won the fight against inflation.
Higher interest rates slow the country’s economic growth, which limits oil demand.
Early Asian oil trading on Monday is expected to be light as most markets in the region, including those in China, Hong Kong, Japan, South Korea, Singapore, Taiwan, Vietnam and Malaysia, are closed for holidays.
Financial markets in mainland China are closed for Chinese New Year and will resume trading on Monday, February 19. In Hong Kong, this will happen on February 14.
