Oil prices experienced a decline of more than $1 per barrel on Monday, with Brent slipping below the $90 mark, attributed to easing Middle East tensions following Israel’s withdrawal of additional soldiers from southern Gaza and its commitment to new talks on a potential ceasefire in the six-month conflict.
Brent crude futures dropped by $1.42, or 1.6%, settling at $89.75 a barrel by 0430 GMT, while U.S. West Texas Intermediate crude saw a decrease to $85.59 per barrel, down $1.32, or 1.5%.
According to IG market analyst Tony Sycamore, the catalyst for this decline appears to be Israel’s announcement of withdrawing all troops except one brigade from the Southern Gaza strip, likely in response to mounting international pressure and a bid to deescalate tensions, especially after its involvement in the killing of senior Iranian commanders in Syria last week.
Israel and Hamas have initiated fresh talks in Egypt regarding a potential ceasefire ahead of the Eid holidays, a move that has contributed to easing tensions in the Middle East and alleviating concerns of supply disruption, which had driven oil prices up by more than 4% last week.
Israeli Defence Minister Yoav Gallant affirmed on Sunday Israel’s readiness to handle any scenario that may arise with Iran, in light of Tehran’s threats of retaliation for the killing of Iranian generals on April 1.
Meanwhile, Saudi Arabia, the world’s top oil exporter, has raised official selling prices for all crude grades to Asia for May, in line with market expectations, following a tightening of heavy oil supply.
In a separate incident, a fire struck an offshore platform operated by Mexico’s national oil company Pemex on Saturday, resulting in the death of at least one contractor. This occurred after Pemex requested its trading unit to cancel up to 436,000 barrels per day of crude exports in April.
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