Oil prices slid more than $1 on Monday as diplomatic efforts grew over the weekend to contain a conflict between Israel and Hamas, amid worries of a wider confrontation in the oil-rich region and pressure on supplies.
Brent crude futures fell 67 cents to $91.49 a barrel, as of 0203 GMT, having lost $1.02 to $91.14 a barrel earlier in the session. US West Texas Intermediate crude futures lost 72 cents to trade at $87.36 a barrel, after sliding $1.72 to $87.03 a barrel earlier on Monday.
The contracts had risen more than 1% last week for a second consecutive weekly jump on fear of potential supply disruption if the Israel-Hamas war grows into a wider confrontation in the Middle East, the world’s biggest oil-supplying region.
Aid convoys started to arrive in the Gaza Strip from Egypt over the weekend, as Arab leaders and foreign ministers gathered for a summit in Cairo which was unable to yield a joint statement.
“Israel agreed to hold off its attack on Hamas following pressure from the US,” ANZ Research said in a client note. “This eased concerns that the Israel-Hamas war would spread across the Middle East and disrupt supplies.”
But in the latest developments, Israel bombarded Gaza with air strikes and its aircraft struck Lebanon. Asian shares drifted lower on Monday.
To ease oil supply pressure – already tight due to output cuts by the Organization of the Petroleum Exporting Countries (OPEC) and affiliates including Russia – the US suspended sanctions on OPEC member Venezuela after a Venezuelan government deal with the opposition.
US President Joe Biden, who visited Israel last week, had calls on Sunday with the leaders of Canada, France, Britain, Germany and Italy, after speaking with Israeli Prime Minister Benjamin Netanyahu and Pope Francis.
Leaders of France and the Netherlands will visit Israel this week in search of a solution for the conflict which ignited on October 7 after a Hamas attack.