Oil prices declined by 2% today as market participants anticipated a postponement of Israel’s ground assault on Gaza.
Brent crude dropped to a low of $91.11 in the morning session, a decrease from $92.51 the previous day, due to Israel’s decision to delay its operation while engaging in talks to ensure the safe return of additional hostages.
West Texas Intermediate also experienced a dip, nearing $87 per barrel, following two weeks of consecutive price increases.
Since Hamas launched attacks on Israel on October 7, Brent crude prices surged by 8%, with concerns that the dispute might intensify throughout the Middle East, jeopardizing the region’s oil supplies.
Yeap Jun Rong, a market analyst at IG Asia Pte, informed Bloomberg that the oil market is currently “taking a pause as the emphasis shifts towards humanitarian assistance and the process of ensuring the safe return of hostages, suggesting that Israel’s potential ground incursion could be delayed. This might limit the chances of the situation escalating further, at least in the immediate future.”
The risk premium associated with the conflict might also be balanced out if Venezuela increases its oil exports, following the U.S.’s initial steps last week to roll back sanctions against the nation.
