Oil prices gained more than two percent on Thursday, February 8, as investors considered the impact of Israel’s rejection of a ceasefire offer from Hamas and unexpected drops in US fuel supplies. Diplomatic efforts continue, and a Hamas delegation arrives in Cairo on Thursday for ceasefire talks with mediators Egypt and Qatar.
Brent crude futures rose $1.70, or 2.15 percent, to $80.91 a barrel. U.S. West Texas Intermediate crude futures were up $1.61, or 2.18 percent, at $75.47. The Brent benchmark broke $80 a barrel for the first time since February 1, when it extended into a fourth straight session of gains, according to news agency Reuters.
At home, on the Multi Commodity Exchange (MCX), crude oil futures ahead of February 16 expiration last traded 2.35 percent higher at ₹6,275 per bbl, having swung between ₹6, 112 and ₹6,280 per bbl during the session, against a previous close of ₹6,131 per barrel.
What drives oil prices?
-Analysts said that the recent force is the result of the Israeli response to the Hamas counter-proposal to the original peace plan, which ensures that hostilities in the Red Sea will continue unabated.
-Israeli Prime Minister Benjamin Netanyahu rejected the latest offer of a ceasefire by Hamas and the return of hostages held in the Gaza Strip, but US Secretary of State Antony Blinken said there is still room for negotiation.
-Broader Middle East tensions have kept the market on edge since October, with limited progress in negotiations to end the Gaza conflict. Stronger-than-expected declines in US gasoline and middle-distillate stocks also boosted the oil market.
-Continued US refinery maintenance, along with Europe short of diesel, may help maintain the positive sentiment in oil prices for now, according to analysts. Norway’s Johan Sverdrup oil field – the largest in the North Sea – will maintain stable production at a higher rate of 755,000 barrels per day for the rest of this year.
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Published: 08 Feb 2024, 21:59 IST