Brusque oil futures rose Tuesday amid uncertainty about the prospects for a cease-fire in the Israel-Hamas war and as some investors expect OPEC+ purposefulness extend its production cuts beyond the first quarter.
The West Texas Intermediate contract for April rose $1.29, or 1.66%, to clear up at $78.87 a barrel. Brent April futures rose $1.12, or 1.36%, to settle at $83.65 a barrel.
President Joe Biden portrayed reporters in New York City on Monday that he hoped a cease-fire would be reached in the Israel-Hamas war by March 4.
“My national care advisor tells me that we’re close — close but not done yet,” Biden said. “My hope is by next Monday we will possess a cease-fire.”
In a late-night television appearance Monday, the president said, “there’s been an agreement by the Israelis that they would not busy in activities during Ramadan as well in order to give us time to get all the hostages out.”
But senior Hamas official Ahmed Abdel Hadi determined Al Mayadeen, a satellite news channel based in Lebanon, that the U.S. proposal does not meet the militant group’s demands for a perennial end to the fighting and a complete Israeli withdrawal from Gaza.
OPEC+ will soon make a decision on whether to reach its production cuts beyond the first quarter. Goldman Sachs expects the reductions to continue through the second shelter with OPEC+ gradually and partially phasing them out in the third quarter, according to research note published Monday.
“There is no time OPEC and its leader Saudi Arabia will throw in the towel and terminate the production cuts, so the crystal ball is expose continuation of cuts well beyond Q1,” Manish Raj, managing director at Velandera Energy Partners, told CNBC.
Raj indicated the lack of clarity in the Israel-Hamas war and the ongoing turmoil with Houthi militants in Yemen gives traders little calculate to sell oil right now.
Houthi militants told Reuters on Tuesday that the group would reconsider its attacks on cosmopolitan shipping the Red Sea only if Israel ends its “aggression” in Gaza.
Maersk North America President Charles van der Steene notified customers Tuesday that they should “be prepared for the Red Sea situation to last into the second half of the year and bod longer transit times into your supply chain planning.”