Oil prices maintained upward momentum on Tuesday, February 6, as investors awaited the result of top US diplomat Antony Blinken’s efforts in the Middle East to halt the Gaza war and quell tensions in a major oil-producing region. Blinken met Saudi Arabia’s de-facto ruler on Monday and landed in Cairo today for a meeting with Egyptian President Abdel Fatah al-Sisi.
Palestinians hope the visit will bring a truce before a threatened Israeli assault on Rafah, a border city where about half the Gaza Strip population is sheltering. Brent crude futures gained 42 cents to $78.41 a barrel, while US West Texas Intermediate crude futures rose 46 cents to $73.24. Both contracts gained nearly one per cent on Monday, rising for the first time in four sessions, according to news agency Reuters.
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What’s influencing crude oil prices?
-Analysts say that the signs of de-escalation in the Middle-Eastern crisis are missing and continue to extend some support to ailing oil prices. The US strikes also do not point to an easing of tensions, as per market voices.
-The ceasefire offer, delivered to Hamas last week by Qatari and Egyptian mediators, has yet to draw a response from militants who say they want more guarantees it will end the four-month-old war.
-At the same time, the US continued its campaign against Iran-backed Houthis in Yemen, whose attacks on shipping vessels have disrupted global oil trading routes. The group has described its recent attacks as acts of solidarity with Palestinians and on Tuesday said that it will escalate further if the Israeli attacks on Gaza do not stop.
-Yet souring demand expectations limited oil’s gains. Analysts said expectations of higher-for-longer interest rates in the US and elsewhere, plus China’s shaky economy, could cap consumption.
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Published: 06 Feb 2024, 10:28 PM IST