Oil down as Middle East tension eases, dollar depreciates

By Sibel Morrow

Oil prices eased on Monday over deescalating tension in the Middle East after Israel said it "concluded" its attacks on Gaza, while a weaker US dollar encouraged oil trade and limited further price losses.

The international benchmark crude Brent traded at $81.85 per barrel at 10.20 am local time (0720 GMT), a 0.41% decrease from the closing price of $82.19 a barrel in the previous trading session on Friday.

The American benchmark, West Texas Intermediate (WTI), traded at the same time at $76.52 per barrel, down 0.41% from Friday's close of $76.84 per barrel.

Oil markets started the week on a bearish sentiment over reports that Israel had conducted a "series of strikes" on southern Gaza that have now "concluded," the Israeli military said earlier on Monday.

Risks remain high for ships traveling through the Red Sea, though, and this is contributing to oil price increases. On Saturday, the Houthi organization in Yemen threatened to expand its activities against Israel in the event that Israel escalated the conflict in Rafah, in the southern Gaza Strip.

The US, meanwhile, carried out "self-defense strikes" against Houthi targets in Yemen on Saturday, the US Central Command (CENTCOM) announced on Sunday.

Further fanning price increases, the US dollar has weakened, making dollar-indexed crude cheaper for other currency-holding traders.

Investors are awaiting the release of US inflation data due on Tuesday, the US inventory data forecast by the American Petroleum Institute late Tuesday, and the US Energy Information Administration’s actual data on Wednesday.