Oil prices up amid failed Gaza cease-fire attempts, Saudi price hikes

By Duygu Alhan

Oil prices rose on Monday following unsuccessful cease-fire attempts in Gaza and Saudi Arabia’s agreement to increase crude oil sale prices, along with uncertainties over the timing of the US Federal Reserve’s (Fed) decision on interest rates.

International benchmark Brent crude traded at $83.56 per barrel at 10.07 a.m. local time (0707 GMT), an increase of 0.72% from the closing price of $82.96 per barrel in the previous trading session.

American benchmark West Texas Intermediate (WTI) traded at $78.72 per barrel at the same time, a 0.78% rise from the previous session that closed at $78.11 per barrel.

Oil prices started the week on a positive note after the unlikely prospect of a cease-fire in Gaza fueled fears of the conflict expanding in the Middle East.

The Israeli army issued urgent evacuation orders Monday morning to Palestinian residents and displaced individuals in several areas of eastern Rafah to immediately relocate to the town of al-Mawasi.

"The army will continue working to achieve the objectives of the war, including dismantling Hamas and returning all Israeli hostages," army spokesperson Avichay Adraee wrote on X.

The escalating tensions in the region, where the majority of global oil reserves are located, fueled supply concerns, lending upward support to oil prices.

Saudi Arabia, the world's largest oil exporter, raised the official selling price of crude oil for June for Asia, Northwest Europe and the Mediterranean regions.

This move boosted expectations of strong market demand over the summer period, putting upward pressure on oil prices.

Meanwhile, uncertainties over when the Fed will start interest rate cuts continue to influence oil prices.

Financial market pricing is starting to reflect predictions that the Fed will decrease interest rates this year, with September being the most likely month to do so.