Oil prices declined in Monday’s trading session, following Israel’s announcement that it has “ended” a series of strikes in southern Gaza, which slightly eased concerns about the supply from the Middle East.
The future contracts for Brent crude decreased by 30 cents, or 0.36%, to $81.89 per barrel, while the future contracts for West Texas Intermediate (WTI) crude dropped by 27 cents, or 0.35%, to $76.57 per barrel by 06:50 GMT.
The geopolitical risks, including concerns about the escalation of the Israeli-Palestinian conflict throughout the region and the possibility of oil supply disruptions from the Middle East, pushed prices up by approximately 6% last week.
While concerns about supplies in the Middle East remained relatively high, news from the United States has somewhat alleviated some of the fears.
US energy companies have increased the number of oil and natural gas rigs to the highest levels since mid-December, indicating a potential increase in production. Last week, domestic production reached a record level of 13.3 million barrels per day.
Concerns about demand continue to exist, with a spokesperson from the Federal Reserve stating that they are not interested in recommending an interest rate cut. This further adds to the voices calling for more measures to curb inflation. Increasing interest rates leads to slowing economic growth, which reduces the demand for oil.
