By Adedapo Adesanya
The oil market rose on Monday as a ceasefire agreement between Hamas and Israel made no progress, leaving the Brent crude grade closing higher by 37 cents or 0.5 per cent at $83.33 a barrel and the US West Texas Intermediate (WTI) crude grade growing to $78.48 a barrel.
Last week, both contracts posted their steepest weekly loss in three months, with Brent falling more than 7 per cent and WTI down 6.8 per cent, as investors weighed weak US jobs data and the possible timing of a Federal Reserve interest rate cut.
On Monday, Israel said the ceasefire proposal from Egypt that Hamas accepted had some far-reaching aspects that were unacceptable.
Hamas has demanded an end to the war in exchange for the freeing of hostages and Israel appeared poised to launch a long-threatened assault in the southern Gaza Strip.
The war began when Hamas militants attacked Israel on October 7, killing about 1,200 people and abducting 252 others, of whom 133 are believed to remain in captivity in Gaza.
Any truce would be the first pause in fighting since a week-long ceasefire in November, during which Hamas freed around half of the hostages.
Support also came as Saudi Arabia moved to raise the official selling prices for its crude sold to Asia, Northwest Europe and the Mediterranean in June, signalling expectations of strong demand this summer.
There are high expectations that the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) will announce at meetings in June plans to continue production cuts in the third quarter.
The next meeting of the allies is set for June 1.
In China, the world’s largest crude importer, services activity remained in expansionary territory for the 16th straight month, while growth in new orders accelerated and business sentiment rose solidly, boosting hopes of a sustained economic recovery.
The Caixin/S&P Global services purchasing managers’ index (PMI) eased to 52.5 from 52.7 in March, remaining in expansionary territory for the 16th straight month. The 50-mark separates expansion from contraction.
The world’s second-largest economy grew faster than expected in the first quarter but it is still facing a host of challenges including a prolonged property slump and lacklustre domestic demand.
China, which is also the world’s largest oil importer, has struggled to mount a solid post-COVID revival, mainly due to the ripple effects on confidence and demand stemming from a prolonged property sector crisis.