Brent loses as diplomatic moves ease supply concerns

The front-month ICE Brent contract has lost $1.40/bbl on the day from Friday, to trade at $92.26/bbl at 09.00 GMT.

PHOTO: A black barrel of oil. Getty Images

Upward pressure:

Brent futures remained above the $90/bbl mark as concerns about tight supply in 2024 continued to keep the oil investors nervous.  

Brent prices have been supported in the past couple of weeks due to growing tension in the Middle East. Currently, concerns about a direct Israel-Hamas conflict due to Israel’s potential ground operation in Gaza have the oil markets' attention, analysts said.

“Markets remain nervous about developments in the Middle East,” said ING Bank’s senior commodities analyst Ewa Mathews. “Clearly, price direction in the short term will be largely influenced by how the situation in the region evolves,” she further added.

The oil market will also closely follow comments from world leaders who have visited Israel in recent weeks. US President Joe Biden, Italy’s Prime Minister Giorgia Meloni, and UK Prime Minister Rishi Sunak have already met Israel's Prime Minister Benjamin Netanyahu last week. Leaders from France and the Netherlands will visit Israel later this week.

Downward pressure:

Brent futures came under pressure after the US government lifted some sanctions on Venezuelan oil last week. The US granted partial relief to Venezuela after the country's government and opposition agreed to settle political feuds and host a fair presidential election next year.

Besides, geopolitical ties between international allies and diplomatic moves to contain the Israel-Hamas conflict have prevented OPEC from imposing an oil embargo on Israel.

Iran’s government blamed Israel for bombing a hospital in Central Gaza and urged Arab countries to put an oil embargo on Israel.

Meanwhile, Israel has denied the charges and blamed Hamas militants for the blast instead.

By Aparupa Mazumder

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