Crude oil storage tanks are seen in an aerial photo at the Cushing Oil Center in Cushing, Oklahoma, USA, April 21, 2020. Portal/Drone Base/File Photo acquire license rights
- Oil prices rose nearly 6% on Friday
- Israel vows to destroy Hamas and prepares moves against Gaza
- US Secretary of State Blinken is traveling to Israel on Monday
LONDON, Oct 16 (Portal) – Brent oil futures stabilized above $90 a barrel on Monday after breaching the threshold on Friday, as investors waited to see whether the Israel-Hamas conflict also attracted other countries .
Brent futures fell 39 cents, or 0.43%, to $90.50 a barrel at 0855 GMT. U.S. West Texas Intermediate (WTI) crude fell 26 cents, or 0.3%, to $87.43 a barrel.
Both benchmarks rose nearly 6% on Friday, sending Brent up 7.5% for the week and WTI up 5.9%, as investors priced in the possibility of a major Middle East conflict.
The war between the Islamist group Hamas and Israel poses one of the biggest geopolitical risks to oil markets since Russia’s invasion of Ukraine last year, and there are concerns about a possible escalation involving Iran.
Iran warned on Saturday that the situation could spiral out of control and have “far-reaching consequences” if Israel’s “war crimes and genocide” were not stopped.
Amid fears of an escalation of the conflict, US Secretary of State Antony Blinken will return to Israel on Monday to discuss “the way forward” after several days of shuttle diplomacy between Arab states.
Israel denied on Monday that a ceasefire had been agreed in southern Gaza, after security sources in Egypt earlier said an agreement had been reached to suspend strikes and allow foreigners to leave and bring aid into the region.
“Investors are trying to figure out the impact of the conflict while a large-scale ground attack has yet to begin after the 24-hour period in which Israel first urged residents of the northern half of the Gaza Strip to flee south,” said Hiroyuki Kikukawa. President of NS Trading, a unit of Nissan Securities.
The foreign ministers of China and Russia met in Beijing on Monday where they discussed the Israel-Hamas conflict.
“The situation remains uncertain and unfavorable for price prediction and there is little chance of a return to a relatively normal market, whatever that may be post-COVID/Ukraine,” said PVM analyst John Evans.
Elsewhere, the United States last week imposed its first sanctions on owners of tankers that transported Russian oil at a price above the G7 price cap of $60 a barrel. In doing so, they wanted to close loopholes in the mechanism that is supposed to punish Moscow for its invasion of Ukraine.
Russia is one of the world’s largest crude oil exporters, and tighter U.S. controls on its supplies could limit supply.
Reporting by Robert Harvey in London, Yuka Obayashi in Tokyo and Emily Chow; Editing by Susan Fenton
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