(New York) Oil prices fell on Monday, while a regional conflagration is for the moment avoided in the Middle East despite fighting inside the Gaza Strip.
A barrel of Brent from the North Sea for delivery in December lost 3.34% to $87.45.
Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery the same month, lost 3.77% to $82.31.
Oil prices are “under pressure […] despite the escalation of the war between Israel and Hamas,” commented Tickmill analyst James Harte.
Violent ground fighting took place on Monday, inside the Gaza Strip, between Hamas fighters and the Israeli army, on the 24e day of the conflict triggered by the bloody attack by the Palestinian Islamist movement in Israel on October 7.
But “for now, markets seem to be looking beyond this information and believe that the conflict should remain contained,” says Mr. Harte.
“Israel has managed to be present in Gaza without carrying out a total invasion” and “despite isolated incidents”, we are not witnessing “massive missile attacks from Hezbollah towards Israel”, judged Robert Yawger of Mizuho USA.
“As long as the United States, Iran or Saudi Arabia are not drawn into this conflict, brokers are ready to reduce the war risk premium” on oil prices, the analyst added.
The World Bank assessed in a report on Monday that a worst-case scenario – the case where the conflict in the Middle East widens and prolongs – would lead the barrel of oil to reach between 140 and 157 dollars.
For John Evans of PVM Energy, investors’ attention this week should also be on “what is happening in the broader macroeconomic context, in a period rich in data”, in particular the monetary policy decision of the Reserve American federal government (Fed) expected on Wednesday.
The Fed is expected to once again maintain rates at their current level.
But we will have to pay attention to the press release from the Monetary Committee of the central bank as well as the press conference of its president Jerome Powell to check if there are no elements “likely to destroy demand” for energy, added Robert Yawger.
If the Fed suggests that another rate hike may be looming in the first quarter, this could discourage travel and spending by consumers and businesses alike, leading to a drop in demand for black gold.