On Monday, oil prices plunged as Middle East tensions eased following Israel retreated soldiers from Gaza and pledged to new talks on a potential ceasefire.
In the Asian afternoon session, Brent futures ending in June declined by -1.05% to $90.21 per barrel. More so, West Texas Intermediate futures for May delivery dipped by -0.99% to $86.05 a barrel.
Meanwhile, the action likely depreciated the long-term dispute, which was crucial to improving oil markets and supplies in the current weeks.
Furthermore, oil prices were open to some gains following their climb to five-month highs last week after Iran threatened a military move against Israel over claimed attacks on an embassy in Syria.
Israel and Hamas have sent teams to Egypt for new peace talks on possible ceasefire ahead of the Eid holidays, easing tensions in the Mideast that steered oil prices to surge as much as 4.00% last week on supply concerns disruption.
Yoav Gallant, Israel’s Defense Minister, stated that the country is ready to control any scenario that may occur with Iran after Tehran threatened to strike back for the killing of Iranian generals last April 1.
Meanwhile, Saudi Arabia, the world’s biggest oil exporter, raised official retail prices for all crude grades to Asia in May, which was in line with expectations, following a heavy, tight oil supply.
OPEC+, Russia Oil Supply Cuts Remain in Action
The anticipation of oil supply tightening also increased crude prices last week and persisted in remaining in play.
The Organization of Petroleum Exporting Countries and allies (OPEC+) have recently said that its production slash will remain until the end of June, while Russia also indicated deeper supply cuts.
Furthermore, Russian fuel output was interrupted by Ukrainian strikes on the country’s buildings, which shut down numerous crucial refineries.
Meanwhile, China’s buoyant economic demand has built optimism, while declining US gasoline stockpiles presented strong demand in the world’s top importer.
Analysts anticipate Brent to remain below $100 per barrel in its expected outcome that presumes already have stable demand. Moreover, the absence of geopolitical attacks on oil stock and elevated spare capacity led to an OPEC+ surge in output in the third quarter.
