Oil futures rise on Saudi price hike, Gaza conflict concerns

Oil futures rose on Monday following Saudi Arabia’s decision to increase crude prices for June across most regions.

Concerns about the potential escalation of the Israel-Hamas conflict also contributed to the uptick in prices, as hopes for a Gaza ceasefire dwindled.

Brent crude futures climbed by 0.6% to $83.47 per barrel, while U.S. West Texas Intermediate crude futures rose by 0.7% to $78.64 per barrel.

Last week, both Brent and WTI futures experienced their sharpest weekly declines in three months, with Brent falling over 7% and WTI dropping by 6.8%.

This decline was attributed to weak U.S. jobs data and uncertainty about the Federal Reserve’s interest rate policy.

Despite ongoing talks for a Gaza ceasefire, the prospects for an agreement appeared slim, as Hamas reiterated its demands and Israeli Prime Minister Benjamin Netanyahu rejected certain conditions.

Israel’s military also announced plans for a “limited scope” operation in Rafah, which raised concerns about a potential escalation.

Analysts warned that the renewed tensions in the Middle East could reignite geopolitical concerns and impact oil prices.

Furthermore, Saudi Arabia’s decision to raise official selling prices (OSPs) for crude sold to key regions signalled expectations of strong demand in the coming months.

Meanwhile, in China, services activity continued to expand for the 16th consecutive month, indicating a positive outlook for economic recovery.

Additionally, U.S. energy companies reduced the number of oil rigs for the second consecutive week, suggesting a potential tightening of supply in the market.