October 24, 2023 (MLN): Oil prices extended their downturn on Tuesday as investors weighed increased diplomatic initiatives over the weekend aimed at reducing conflicts between Israel and Hamas.
Brent crude is currently trading at $89.08 per barrel, down by 0.31% on the day.
While West Texas Intermediate crude (WTI) is trading at $85.49 per barrel, down by 0.4% on the day.
Both benchmarks fell more than 2% on Monday as diplomatic efforts in the Middle East, the world's biggest oil-supplying region, intensified to contain the conflict between Israel and Hamas, easing investor worries about supply disruptions, as Reuters reported.
Hamas on Monday said it had freed two Israeli women who were among the more than 200 hostages taken during its October 07 rampage in southern Israel, while sources said the U.S. had advised Israel to hold off on a ground assault in the Gaza Strip.
But Israel continued its bombardment of Gaza on Monday after launching air strikes over southern Lebanon overnight.
"The Israel-Hamas situation remains highly fluid and clearly, the market remains divided over whether the conflict will continue to ease from here as Hamas continues to release hostages or flares up again," said Vandana Hari, founder of oil market analysis provider Vanda Insights.
Israel pounded hundreds of targets in Gaza from the air on Monday as its soldiers fought Hamas militants during raids into the besieged Palestinian strip, where deaths are soaring and civilians are trapped in harrowing conditions.
"We expect WTI to move within the $80-$90 range for a while, with all eyes on the situation in Israel and Gaza, OPEC production, and the pace of demand recovery in China," Takashima said, adding investors were also focusing on U.S. inventory data.
