Oil prices rise with no Gaza ceasefire in sight

August 25, 2024 07:17 PM PDT | By Investing

Oil prices rise with no Gaza ceasefire in sight

Gaza ceasefire remains elusive in Cairo talks

Media reports showed that talks between Hamas and Israel in Cairo yielded no agreement for a ceasefire over the weekend, diminishing any chances of deescalation in the 10-month old war.

U.S. officials said the talks were constructive, although the apparent lack of an agreement undermined earlier, optimistic comments from U.S. officials. Still, talks are set to continue in the coming days.

Strikes between Hezbollah and Israel over the weekend also further complicated the prospect of a ceasefire, although both sides said they did not want an escalation.

Persistent instability in the Middle East saw traders attach some risk premium to oil, amid bets that a spillover of the Israel-Hamas conflict could destabilize oil production in the crude-rich region.

Rate cut cheer, weak dollar buoy oil

Growing optimism over lower U.S. interest rates also supported oil prices, as traders bet that the world’s biggest economy was headed for a soft landing.

The dollar slid to a 13-month low, further benefiting crude markets. A softer dollar makes oil cheaper for international buyers.

The Federal Reserve is widely expected to cut interest rates in September, although traders are split over a 25 or 50 basis point cut.

Recent inventory data from the U.S. showed fuel demand in the country remained strong, further spurred bets that oil demand will remain strong.

But persistent concerns over an economic slowdown in top oil importer China limited overall gains in crude.

This article first appeared in Investing.com

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