Oil prices experienced a slight downturn as ceasefire negotiations between Israel and Hamas in Cairo tempered fears of further escalation in the Middle East.
Brent crude futures saw a marginal decrease of 0.06%, reaching $88.35 per barrel, while U.S. West Texas Intermediate crude futures slipped by 0.15% to $82.51 per barrel. The previous day, both benchmarks lost over 1%.
Following Israel’s presentation of a phased truce proposal over the weekend, Hamas negotiators departed Cairo to confer with their leadership. The outcome of these discussions is awaited within two days, as per Egyptian security sources.
Despite diplomatic efforts, continued Israeli airstrikes in Gaza led to fatalities, with a significant number occurring in Rafah, prompting calls from foreign leaders to refrain from further military action.
Meanwhile, ongoing attacks by Yemen’s Houthi rebels on maritime traffic near the Suez Canal have sustained oil prices, with potential disruptions in crude supply leading to heightened risk premiums.
Attention turns to the U.S. Federal Reserve’s policy review scheduled for May 1, with market focus on inflation trends influencing expectations for rate adjustments.
Stubborn inflation rates have deferred market anticipations for rate cuts, which could potentially bolster the U.S. dollar and temper oil demand.
Some investors are cautiously factoring in a heightened likelihood of the Fed implementing a quarter percentage point interest rate hike this year and next, driven by the resilience of inflation rates and the labor market.
