By Florence Tan
SINGAPORE (Reuters) – Oil futures rose on Monday after Saudi Arabia raised oil prices in June for most regions and the prospect of a ceasefire deal in Gaza appeared slim, renewing fears that the Israel-Hamas conflict could still worsen in the important oil-producing region.
Brent crude futures were up 28 cents, or 0.3%, at $83.24 a barrel by 01:19 GMT, while West Texas Intermediate crude futures were at $78.40 a barrel, up 29 cents. , or 0.4%.
Saudi Arabia increased the official selling prices (OSP) of its crude sold to Asia, Northwest Europe and the Mediterranean in June, signaling expectations of strong demand this summer.
“After falling just over 7.3% last week as geopolitical tensions eased, ICE Brent began the new trading week on a stronger footing, opening higher,” said Warren Patterson, head of research at ING commodities, in a note.
This comes after Saudi Arabia increased June OSPs for most regions amid a supply squeeze this quarter, he added.
Last week, both futures contracts posted their biggest weekly losses in three months, with Brent falling more than 7% and WTI falling 6.8% as investors weighed weak U.S. jobs data. and the possible timing of a Federal Reserve interest rate cut.
The geopolitical risk premium in oil prices has also declined as negotiations for a ceasefire in Gaza take place.
However, prospects for a deal appeared slim on Sunday, when Hamas reiterated its demand for an end to the war in exchange for the release of hostages, and Israeli Prime Minister Benjamin Netanyahu categorically ruled out that possibility.
In a sign that supply may dwindle, U.S. energy companies reduced the number of oil and natural gas rigs in operation for a second consecutive week last week, with oil rigs falling by seven to 499 in the biggest weekly drop since November 2023, Baker Hughes said. in a report on Friday.
(Reporting by Florence Tan; Editing by Sonali Paul)
