Crude Oil Prices Rise Amid Gaza Ceasefire Rejection
08 Feb 2024
Crude oil prices climb following the rejection of a ceasefire in Gaza and positive U.S. stock data.
Oil prices rose on Thursday as investors assessed the ramifications of Israel’s rejection of a ceasefire proposal from Hamas and unexpected declines in U.S. fuel inventories.
The Brent benchmark surpassed $80 per barrel, marking its first time crossing this threshold since February 1, as it continued its upward trajectory for the third consecutive session.
“The recent strengthening of oil prices is attributed to Israel’s rejection of the counteroffer from Hamas regarding the original peace plan, indicating that tensions in the Red Sea region will persist without resolution,” stated PVM analyst Tamas Varga.
Israeli Prime Minister Benjamin Netanyahu declined the recent ceasefire offer from Hamas, including the return of hostages in the Gaza Strip. However, U.S. Secretary of State Antony Blinken expressed openness to continued negotiations.
Diplomatic efforts are ongoing, with a Hamas delegation engaging in ceasefire discussions in Cairo with mediators Egypt and Qatar. Simultaneously, Jordan’s King Abdullah is set to meet with U.S. President Joe Biden to advocate for an end to the conflict.
Broader tensions in the Middle East have maintained market apprehension since October, marked by slow progress in negotiations to resolve the Gaza conflict.
On Thursday, the Israeli military escalated its bombardment of the southern border city of Rafah, where a significant portion of Gaza’s population seeks refuge.
The oil market received a boost from a more significant than anticipated reduction in U.S. gasoline and middle-distillate stocks.
According to data from the Energy Information Administration, distillate stockpiles declined by 3.2 million barrels to 127.6 million barrels, surpassing expectations of a 1-million-barrel decrease. Gasoline stocks also experienced a notable decline of 3.15 million barrels, contrary to analyst predictions of a 140,000-barrel build.