Oil prices drop as tension eases, dollar depreciates

The U.S. dollar has weakened, making dollar-indexed crude cheaper for other currency-holding traders

As the tensions in the Middle East escalated after Israel said it “concluded” its attacks on Gaza, Oil prices eased Monday. Meanwhile, a weaker U.S. dollar encouraged oil trade and limited further price losses.

The international benchmark crude Brent traded at $81.85 per barrel at 10:20 a.m. 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 with 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.

However, risks remain high for ships traveling through the Red Sea, contributing to oil price increases. On Saturday, the Houthi organization in Yemen threatened to expand its activities against Israel if Israel escalated the conflict in Rafah, in the southern Gaza Strip.

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

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

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

Source: AA