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Oil prices surged on Thursday following Israel’s rejection of a ceasefire proposal from Hamas, heightening geopolitical tensions in the Middle East. Concurrently, robust demand for fuel in the United States contributed to the market’s upward trajectory this week.
Market Performance and Price Movement
As of 01:32 GMT, Brent crude futures climbed by 22 cents, or 0.28 percent, reaching $79.43 per barrel, while US West Texas Intermediate crude futures saw an increase of 19 cents, or 0.26 percent, reaching $74.05 per barrel.
Geopolitical Developments in the Middle East
Israeli Prime Minister Benjamin Netanyahu dismissed Hamas’s latest ceasefire proposal, emphasizing the ongoing tensions in Gaza. However, US Secretary of State Anthony Blinken indicated the possibility of continued negotiations to reach a resolution. A Hamas delegation led by Khalil al-Hayya is set to engage in discussions with Egypt and Qatar in Cairo regarding a potential ceasefire.
US Fuel Demand and Inventory Data
Strong demand for fuel in the United States further bolstered oil prices. Recent data revealed a significant decline in gasoline stocks, contrasting analysts’ expectations of a rise. The US Energy Information Administration reported a reduction of 3.15 million barrels in gasoline inventories, highlighting robust demand for crude.
Analysis and Expert Insights
ANZ Research noted that the decrease in gasoline inventories, coupled with a 13 percent increase in US oil exports in 2023, reflects a strengthening demand for crude. This observation underscores the market’s resilience amidst geopolitical uncertainties and supports the ongoing rally in oil prices.
Conclusion: Navigating Volatility Amidst Geopolitical Uncertainties
The surge in oil prices driven by geopolitical tensions in the Middle East and strong US demand underscores the complex dynamics shaping global energy markets. As negotiations continue to mitigate tensions and address supply-demand dynamics, market participants must remain vigilant to navigate the evolving landscape effectively.
