Brent moves lower as Gaza ceasefire talks come into focus
The front-month ICE Brent contract lost $1.40/bbl on the day from Friday, to trade at $85.93/bbl at 09.00 GMT.
PHOTO: Oil barrels. Getty Images
Upward pressure:
Hurricane Beryl, now a Category 1 hurricane, is expected to make landfall in Texas today after tearing through parts of the Caribbean, the National Hurricane Center (NHC) said. The movement of Beryl continues to threaten oil production in the US, according to analysts.
Beryl has "raised supply concerns after causing fatalities and damage in the Caribbean,” analysts from Saxo Bank said. All operations in several US Gulf Coast ports, including the ports of Houston, Galveston, Freeport, Texas City and Corpus Christi have been suspended since this morning.
“A shift in Hurricane Beryl’s path puts refinery infrastructure in Texas at risk,” two analysts from ING Bank remarked.
Besides, a massive drawdown in US crude oil inventories continued to support Brent futures. The US Energy Information Administration (EIA) reported a decline of 12.16 million bbls in US crude oil stocks in the week ending 28 June.
The steep fall in US crude stocks “was driven by strong underlying demand,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.
Downward pressure:
A potential ceasefire plan between Israel and Hamas has eased some supply concerns in the Middle East and put downward pressure on Brent’s price today.
The US is negotiating a ceasefire plan to end the ongoing conflict in the Gaza Strip, according to a Reuters report. The plan is being mediated by Qatar and Egypt.
Iran-aligned Hamas leaders on Saturday greenlighted the ceasefire plan, the Associated Press (AP) reported. If both the warring parties agree to the ceasefire plan, this could gradually end the nine-month-old conflict in the Middle East and put oil supply disruptions in the region out of any risk, analysts argue.
“Hamas leaders on Saturday gave their initial approval to a US-backed proposal for a phased ceasefire deal after dropping a key demand that Israel commit up-front to a complete end to the war,” VANDA Insights’ founder and analyst Vandana Hari said.
By Aparupa Mazumder
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