Oil rises on slim progress in Gaza peace talks, weaker dollar

Published On : 02/08/2024

By Katya Golubkova and Jeslyn Lerh

SINGAPORE (Reuters) -Oil extended gains on Thursday after Israel rejected a ceasefire offer from Hamas, while a weaker dollar also supported prices.

Brent crude futures rose 30 cents, or 0.4%, at $79.51 a barrel at 0400 GMT. U.S. West Texas Intermediate crude futures climbed 26 cents, or 0.4% to $74.12 a barrel.

Wider Middle East tensions have kept the market on edge since October, with limited progress in talks to end the Gaza conflict.

Israeli Prime Minister Benjamin Netanyahu rejected Hamas’ latest offer for a ceasefire and return of hostages held in the Gaza Strip, but U.S. Secretary of State Antony Blinken said there was still room for negotiation toward an agreement.

A Palestinian Hamas delegation led by senior official Khalil Al-Hayya was due to travel on Thursday to Cairo for ceasefire talks with Egypt and Qatar.

A weaker dollar also supported oil prices on Thursday as it makes crude less expensive for traders holding other currencies.

The dollar index, which measures the greenback against six major peers, fell to 103.99 at 0400 GMT.

On the demand side, a stronger-than-expected drawdown in U.S. gasoline and middle distillate stocks also buoyed the oil market.

Distillate stockpiles fell by 3.2 million barrels to 127.6 million barrels, Energy Information Administration data showed, versus expectations for a 1 million-barrel drop. Gasoline stocks fell by 3.15 million barrels, compared with analysts’ estimates for a build of 140,000 barrels.

On the back of those falling inventories, U.S. refinery margins continued to strengthen, said ING analysts in a note.

“The strength in refinery margins should provide some support to crude oil, by driving stronger crude demand as refineries look to increase run rates and take advantage of stronger margins,” the ING analysts said.

The drop in gasoline stocks and a 13% year-on-year rise in U.S. oil exports to a record 4.06 million barrels per day in 2023 “both indicate stronger demand for crude”, ANZ Research said in a note.

(Reporting by Katya Golubkova In Tokyo and Jeslyn Lerh in Singapore; Editing by Sonali Paul)

Wanda Rich

Wanda Rich has been the Editor-in-Chief of Global Banking & Finance Review since 2011, playing a pivotal role in shaping the publication’s content and direction. Under her leadership, the magazine has expanded its global reach and established itself as a trusted source of information and analysis across various financial sectors. She is known for conducting exclusive interviews with industry leaders and oversees the Global Banking & Finance Awards, which recognize innovation and leadership in finance. In addition to Global Banking & Finance Review, Wanda also serves as editor for numerous other platforms, including Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.