By Florence Tan
SINGAPORE (Reuters) – Oil prices rose slightly on Monday after Saudi Arabia raised crude prices in June for most regions and as prospects for a Gaza ceasefire deal appear slim , reigniting fears that the Israel-Hamas conflict could further expand into the key oil-producing region.
Brent crude futures rose 28 cents, or 0.3 percent, to $83.24 a barrel by 0119 GMT, while U.S. West Texas Intermediate crude futures were at $78.40. per barrel, up 29 cents, or 0.4%.
Saudi Arabia raised official selling prices (OSPs) of its crude sold in Asia, northwest Europe and the Mediterranean in June, signaling expectations of strong demand this summer.
“After falling just over 7.3% last week due to easing geopolitical tensions, ICE Brent began the new trading week on firmer footing, opening higher,” said Warren Patterson, head of commodities research at ING, in a note.
This comes after Saudi Arabia increased June PSOs for most regions amid tighter supplies this quarter, it added.
Last week, both futures contracts posted their biggest weekly losses in three months, with Brent falling more than 7% and WTI falling 6.8%, as investors weighed in on weak data on the employment in the United States and the possible timetable for an interest rate cut by the Federal Reserve.
The geopolitical risk premium on oil prices has also declined as negotiations for a ceasefire in Gaza continue.
However, prospects for a deal appeared slim on Sunday as Hamas reiterated its demand to end the war in exchange for the release of the hostages, something Israeli Prime Minister Benjamin Netanyahu categorically ruled out.
In a sign that supply could be tightening, U.S. energy companies reduced the number of operating oil and gas rigs for the second week in a row last week, with seven oil rigs falling to 499, the most sharp weekly decline since November 2023, Baker Hughes said. in a report Friday.
(Reporting by Florence Tan; editing by Sonali Paul)
