(London) Oil prices hesitated on Tuesday, shaken by the uncertainty of the situation in the Middle East, where Israel refused a truce proposal in Gaza, and somewhat weighed down by data pointing to sluggish American demand.
Around 6:35 a.m., the price of a barrel of Brent from the North Sea for delivery in July fell 0.22% to 83.15 dollars, after having moved in the positive direction at the start of the session.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in June, fell by 0.22% to $78.31.
“Under normal circumstances, oil should follow the movements of other risk assets”, like stocks rising, notes Tamas Varga of PVM Energy, but the situation remains “anything but normal” in the region.
On Monday, Israel called on Palestinian civilians to evacuate the town of Rafah in southern Gaza, which was interpreted as a sign of an imminent military operation in what Israel believes is Hamas’s last stronghold.
“Oil prices increased, but the wind (bullish, Editor’s note) was cut a few hours later,” indicates the analyst, after the announcement by the Palestinian Islamist movement that it accepted a truce project, notably in view of allow a break in the fighting that has been going on for seven months in the Gaza Strip and an exchange of Palestinian detainees for hostages kidnapped by Hamas on October 7.
But Israel announced that this project was “far from Israeli demands” and remains determined to continue its operations in Rafah “to exert military pressure on Hamas”.
On Tuesday, the Israeli army deployed tanks into Rafah and took control of the border crossing with Egypt, cutting off access for humanitarian aid.
Crude purchases in financial markets are also dampened by Friday’s figures in the United States, notes Tamas Varga, where employment growth slowed more than expected in April and unemployment increased slightly, to 3.9 %, accentuating fears of a weakening of American demand.
The prices of the two crude benchmarks have also been weighed down since Wednesday by “the unexpected increase in crude oil stocks in the United States at the end of April,” notes Carsten Fritsch, analyst at Commerzbank, accompanied by mediocre demand for gasoline.
Finally, in less than a month, there will be a meeting of members of OPEC+ (the Organization of the Petroleum Exporting Countries and their allies, Editor’s note), likely according to analysts to renew their production cuts, in the hope to support the courses.