Crude oil futures rose on Monday after Saudi Arabia raised June oil prices for most of the region and as a Gaza cease-fire deal eased to ease fears of the Israel-Hamas conflict still reverberating in the major oil-producing region.
Meanwhile, Brent crude rose 28 cents (0.3%) to $83.24 per barrel and US West Texas Intermediate (WTI) was at $78.40 per barrel, up 29 cents (0.4%).
Recently, Saudi Arabia raised the official selling price (OSP) for its crude oil sold to Asia, Northwest Europe and the Mediterranean in June. This indicates expected strong demand this summer.
According to ING Head of Commodity Research, Warren Patterson said after falling more than 7.3% last week due to easing geopolitical tensions, Brent started the new week on a stronger level and opened higher.
This comes after Saudi Arabia raised its June OSP for most regions amid tightening supplies this quarter.
Last week, both contracts posted their worst weekly losses in three months with Brent falling more than 7% and WTI down 6.8% as investors scrutinized weak US jobs data and the possible impact of a period of interest rate cuts.
Geopolitical risks to oil prices have also decreased as talks for a Gaza ceasefire are underway.
However, prospects for a deal appeared slim on Sunday when Hamas reiterated its demand for an end to the war in exchange for the release of hostages with Israeli Prime Minister Benjamin Netanyahu rejecting it.
Based on tightening market sentiment, US energy companies cut the number of oil and natural gas rigs operating for the second week in a row. Oil rigs fell by seven to 499 in the biggest weekly decline since November 2023.
