Oil futures experienced an increase in value early on Thursday, as Brent crude made its way back towards the $80-a-barrel mark. This rise came after Israel refused a cease-fire offer from Hamas, along with the return of hostages being held in the Gaza Strip.
West Texas Intermediate crude for March delivery rose 0.8% to $74.44 a barrel on the New York Mercantile Exchange.
April Brent crude, the global benchmark, was up 0.9% at $79.92 a barrel on ICE Futures Europe. The last time Brent traded above $80 was on February 1.
Since the start of the Israel-Hamas conflict in October, oil futures have seen temporary increases due to developments in the Middle East. However, these increases have not been sustained, and both Brent and WTI continue to trade significantly below their September 2023 highs.
This week, crude oil found support following U.S.-led airstrikes on Iran-backed militias in Iraq and Syria. These airstrikes were in response to a drone attack last month that resulted in the deaths of three U.S. troops in Jordan. The U.S.-led coalition also carried out renewed strikes on Iran-backed Houthi rebels in Yemen, who have been targeting Red Sea shipping and causing cargo ships and oil tankers to reroute.
Israeli Prime Minister Benjamin Netanyahu rejected Hamas’s terms for a cease-fire, which included the release of thousands of prisoners. This rejection raised concerns about the situation in the Middle East, contributing to the recent upward trend in crude oil prices.
Ricardo Evangelista, a senior trader at ActivTrades, commented via email that while Gaza remains the main focal point of the crisis, its impact extends throughout the region. This raises the possibility of a broader conflict involving other parties. Such a scenario could disrupt the Suez shipping route and affect oil production in Gulf nations like Iran.