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HomeLatestOil prices experienced a notable decline in early Asian trading
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Oil prices experienced a notable decline in early Asian trading

Oil prices experienced a notable decline in early Asian trading on Monday, attributed to Israel’s partial withdrawal of troops from Gaza and renewed discussions for a potential ceasefire with Hamas.

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The prospect of easing tensions in the longstanding conflict served as a significant factor contributing to the drop in oil prices. Recent weeks had seen heightened concerns about the conflict, which had bolstered oil prices.

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Last week, oil prices had surged to five-month highs amid escalating tensions, particularly after Iran issued threats of military action against Israel following alleged strikes on an embassy in Syria.

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Brent crude futures for June delivery fell by 1.8% to $89.56 per barrel, while West Texas Intermediate crude futures dropped by 1.7% to $84.63 per barrel by 20:35 ET (00:35 GMT).

Ceasefire talks between Israel and Hamas commenced in Egypt ahead of the upcoming Eid holidays. Israel’s withdrawal of troops from Southern Gaza, including Khan Younis, was part of this diplomatic effort, although military presence remained in other areas of the region.

The ceasefire negotiations hinted at a potential reduction in the conflict, with the United States urging Israel to ease its offensive against Gaza amid concerns of human rights violations.

The potential de-escalation of the Israel-Hamas conflict presents a significant development for oil markets, particularly in dispelling fears of crude supply disruptions from the Middle East. This perception had provided considerable support to oil prices in recent weeks and is expected to persist until an official ceasefire agreement is reached.

Additionally, expectations of tightened oil supplies had been contributing to the upward momentum in crude prices. The Organization of the Petroleum Exporting Countries (OPEC+) had reaffirmed its commitment to production cuts until the end of June, with Russia also indicating the possibility of further reductions.

Furthermore, disruptions in Russian fuel production due to Ukrainian strikes on oil infrastructure had affected several key refineries, adding to supply concerns.

Despite these factors, positive economic indicators from China, the world’s leading oil importer, bolstered optimism, while diminishing gasoline inventories in the United States signaled robust demand in the largest fuel-consuming nation globally.

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