Oil prices fell more than $1 a barrel on Monday, with Brent to fall below $90 as there are clear signs of easing tension in the Middle East after Israel withdrew large swathes of its troops from southern Gaza and committed to new ceasefire talks.
Brent crude futures were down $1.42, or 1.6%, at $89.75 a barrel while U.S. WTI was at $85.59 a barrel, down $1.32, or 1.5%.
The catalyst Israel
“The catalyst appears to be Israel announcing that it has withdrawn all but one brigade of troops from the southern Gaza Strip, likely in response to growing international pressure and de-escalation of tensions following the killing of senior Iranian commanders in Syria last year. week,” the IG market analyst pointed out, Tony Sycamore.
Israel – Hamas talks in Egypt
Israel and Hamas sent representatives to Egypt for fresh talks on a possible cease-fire ahead of the Muslim holiday of Eid, easing tensions in the Middle East that sent oil prices up more than 4 percent last week on concerns of a disruption supply.
Israeli Defense Minister Yoav Gallant said on Sunday that Israel is ready to face any scenario that may arise with Iran, as Tehran has threatened to respond harshly to the killing of Iranian generals on April 1.
Price increase from Saudi Arabia
The world’s top oil exporter, Saudi Arabia, raised official selling prices for all crude grades in Asia in May, in line with expectations, after the supply of heavy crude oil tightened.
The fire at Pemex, Mexico
Another incident affecting oil developments is the fire that struck an offshore drilling platform operated by Mexico’s national oil company Pemex on Saturday, killing at least one worker. It is noted that Pemex had asked its commercial unit to cancel up to 436,000 barrels per day of crude exports in April.
Goldman Sachs forecasts
However, Goldman Sachs analysts expect Brent to remain below $100 a barrel in its baseline scenario that already assumes steady demand, without further geopolitical upheavals in oil supply, and that increased spare capacity will lead OPEC+ to increase production in the third quarter.
In the United States, oil rigs rose by two to 508 last week, while natural gas rigs fell by two to 110, the lowest since January 2022, Baker Hughes said in a report on Friday.
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