Oil prices increased on Monday amid moderate investor profit-taking, supply uncertainties from tensions in the Middle East, and the possibility of the OPEC+ group’s extended supply cuts.
International benchmark Brent crude traded at $83.09 per barrel at 11.22 a.m. local time (0822 GMT), an increase of 0.36% from the closing price of $82.79 per barrel in the previous trading session.
American benchmark West Texas Intermediate (WTI) traded at $78.58 per barrel at the same time, a 0.41% rise from the previous session that closed at $78.26 per barrel.
Uncertainty over a cease-fire in the Middle East, where the majority of global oil reserves are located, puts upward pressure on oil prices.
Last week, Hamas, which is believed to be holding nearly 130 Israelis following its Oct. 7 cross-border attack, accepted a proposal drawn up by Egypt and Qatar for a cease-fire in Gaza.
But Israel said the truce offer did not meet its key demands and decided to push ahead with an operation in Rafah, home to more than 1.5 million displaced people.
US Secretary of State Antony Blinken said Sunday there are no “red lines” that would prompt Washington to cease backing Israel in its war with Hamas but warned the Israeli army against launching a full-scale ground invasion of the southern Gaza city of Rafah.
He emphasized that Israel has not yet presented a credible plan to protect the city’s nearly 1.5 million Palestinian inhabitants.
Biden had announced Wednesday that he would suspend arms supplies to Israel if a major attack is launched on Rafah.
Expectations that the Organization of the Petroleum Exporting Countries (OPEC) and its partners, known as OPEC+, could prolong supply curbs into the second half of the year buoyed global oil markets.
Experts predict that if oil demand does not improve, OPEC+, which needs higher prices, could agree to sustain its voluntary production cuts at the next meeting on June 1.
Nonetheless, oil prices started the week on a negative note after comments from US Federal Reserve (Fed) officials dampened hopes of interest rate cuts.
Experts agree that keeping interest rates at high levels for a sustained period will slow growth and impair fuel demand in the world’s biggest economy and oil consumer.
The increasing value of the US dollar against other currencies also put downward pressure on prices by making oil expensive for other currency-holding traders.
