According to Reuters, while traders said the Israel-Hamas war did not seem to pose a short-term danger to oil supply, anticipation that the U.S. and Venezuela would soon achieve a deal relaxing restrictions on Venezuelan crude exports caused oil futures to fall more than $1 a barrel.
Brent oil futures decreased $1.24 or 1.4% to close at $89.65 a barrel. West Texas Intermediate (WTI) crude for the United States dropped $1.03, or 1.2%, to close at $86.66 a barrel.
Venezuela’s government and opposition will return to political negotiations this week after nearly a year, the two sides said, while sources said the U.S. has reached a preliminary deal to ease sanctions on Venezuela’s oil industry in return for a competitive, monitored presidential election in Venezuela next year.
Both oil benchmarks had surged last week on fears the conflict in the Middle East could widen, with global benchmark Brent gaining 7.5% in its highest weekly gain since February.
Traders said the war between Israel and the Palestinian Islamist militant group Hamas so far remained focused in the Gaza Strip.
In an attempt to fill gaps in the system meant to deprive Moscow of cash from its energy sales, the United States this week levied the first penalties on owners of ships transporting Russian oil priced higher than the Group of Seven price ceiling of $60 per barrel.
The sudden decision on tightening up of sanctions on ship owners carrying Russian crude over the $60/barrel limit by the U.S. started to niggle and so did the Russian/Saudi meeting concluded by President Putin stating that OPEC+ were achieving ‘stability.
..said PVM analyst John Evans, referring to the price rises at the end of last week.
