NEW DELHI, Oct 23 (Reuters) – Oil prices fell more than a dollar on Monday as worries about supply curbs eased amid intensifying diplomatic efforts to contain the conflict between Israel and the Palestinian Islamist group Hamas.
Brent crude was down 67 cents at $91.49 a barrel by 0628 GMT, having lost $1.08 to $91.08 a barrel on Monday. U.S. West Texas Intermediate crude was down 82 cents at $87.26 a barrel.
The contracts rose more than 1% last week on fears of a potential supply disruption if the Israel-Hamas war in the Middle East, the world’s biggest oil-producing region, develops into a wider conflict.
Aid convoys from Egypt began arriving in the Gaza Strip over the weekend as Arab leaders and foreign ministers gathered for a summit in Cairo and were unable to issue a joint statement.
“There is some relief in the oil market as Israel blocked a planned ground incursion into northern Gaza to negotiate the release of hostages, opening a window for diplomacy,” said Vandana Hari, founder of oil market analysis provider Vanda Insights. .
“A land blockade is seen as a potential trigger for the expansion of the Israel-Hamas conflict in the Middle East region, a factor behind the crude oil risk premium over the past fortnight,” Hari said.
Analysts at ANZ Research echoed the sentiment, saying in a client note that it gave hope that the Israel-Hamas war would not spread across the Middle East and disrupt supply.
But in recent developments, Israel has bombed Gaza and its aircraft have hit Lebanon. Asian stocks fell on Monday.
To ease pressure on oil supplies – already tight due to production cuts by allies including the Organization of the Petroleum Exporting Countries (OPEC) and Russia – the US ended sanctions on OPEC member Venezuela after a deal with the Venezuelan government opposition.
US President Joe Biden, who visited Israel last week, called on Sunday with the leaders of Canada, France, Britain, Germany and Italy after speaking with Israeli Prime Minister Benjamin Netanyahu and Pope Francis.
The leaders of France and the Netherlands will travel to Israel this week to try to resolve the conflict that erupted on October 7 after a Hamas attack.
Reporting by Mohi Narayan in New Delhi, Katya Golubkova in Tokyo and Naveen Dughral in Singapore; Editing by Christopher Cushing and Muralikumar Anantharaman
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