Oil prices ease as aid convoys arrive in embattled Gaza Strip

Oil prices ease as aid convoys arrive in embattled Gaza Strip

Oil prices eased on Monday as aid convoys started to arrive in the Gaza Strip over the weekend amid diplomatic efforts to contain a conflict between Israel and the Palestinian Islamist group Hamas from spreading to the wider oil-rich region.

Brent crude futures fell 77 cents to $91.39 a barrel, which is a fall of 0.81%, as of 8:20 am IST.

For the past week, contracts rose more than 1% for a second consecutive weekly jump, on fear of potential supply disruption if the Israel-Hamas war grows into a wider confrontation in the Middle East, the world's biggest oil-supplying region.

"Israel agreed to hold off its attack on Hamas following pressure from the U.S.," ANZ Research said in a client note. "This eased concerns that the Israel-Hamas war would spread across the Middle East and disrupt supplies."

Meanwhile, Indian markets may face volatile trends amid monthly derivatives expiry on Thursday. Since this week is a holiday-shortened one and we expect volatility to remain high due to the prevailing earnings season and scheduled expiry of October month derivatives contracts, Ajit Mishra, SVP – Technical Research at Religare Broking Ltd, said.

"The market will take further cues from the Israel-Palestine conflict. One should keep a watch on the earnings of major companies in India. Some major global and domestic events will be in focus such as the UK services PMI, US manufacturing and services PMI, US GDP, initial jobless claims, and crude oil inventories,” Arvinder Singh Nanda, Senior Vice President at Master Capital Services Ltd, said.

Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities Ltd, said markets worldwide, including India, will respond to geopolitical challenges, oil prices, and bond yield fluctuations, with continued stock-specific action tied to quarterly results.

To ease supply pressure - already tight due to output cuts by the Organization of the Petroleum Exporting Countries (OPEC) and affiliates including Russia - the U.S. suspended sanctions on OPEC member Venezuela after a Venezuelan government deal with the opposition.

Aid for Gaza

Aid convoys started to arrive to the Gaza Strip from Egypt over the weekend, as Arab leaders and foreign ministers gathered for a summit in Cairo which was unable to yield a joint statement.

U.S. President Joe Biden, who visited Israel last week, on Sunday had calls with the leaders of Canada, France, Britain, Germany and Italy, after speaking with Israeli Prime Minister Benjamin Netanyahu and Pope Francis.

Leaders of France and the Netherlands will visit Israel this week in search of a solution for the conflict which ignited on Oct. 7 after a Hamas attack. In latest developments, Israel has bombarded Gaza with air strikes and its aircraft have struck Lebanon.

(With inputs from agencies)