Oil futures: Brent eases from highs, geopolitical events in focus
Quantum Commodity Intelligence – Crude oil futures Tuesday were easing back from earlier highs, although benchmarks have largely consolidated towards the top end of the two-month trading range.
Front-month Aug24 ICE Brent futures were trading at $85.31/b (1625 GMT), compared to the intraday high of $86.23/b and Monday's settle of $86.01/b.
At the same time Aug24 NYMEX WTI was trading at $81.08/b versus Monday's settle of $81.63/b.
Prices have been underpinned over the past week by demand-growth optimism, while geopolitical tensions have also been raised amid concerns that hostilities on Israel's northern border are set to ratchet up.
"Oil prices are rising, adding to gains in the previous week amid optimism regarding the summer demand outlook. This optimism, combined with escalating geopolitical tensions, offset a stronger US dollar," commented City Index analyst Fiona Cincotta on the previous-session's seven-week highs, noting geopolitical risks in the Middle East and the Russia/Ukraine conflict have increased.
"However, gains in oil are likely to be limited amid a stronger US dollar. The US dollar index trades around a 6 week high, which makes the dollar-denominated commodity less attractive for holders of other currencies," added the City report, noting the Dollar Index at around 105.70 points.
Proposal
Meanwhile, a US-backed proposal in the Gaza conflict looks in doubt after Israeli Prime Minister Benjamin Netanyahu said in an interview he would only be willing to agree to a "partial" ceasefire.
"We are committed to continuing the war after a pause, in order to complete the goal of eliminating Hamas. I'm not willing to give up on that," Netanyahu said in an interview with Israeli TV.
Houthi militants have stepped up attacks on Red Sea shipping, while it has also claimed a strike aimed at Israeli shipping interests in the Mediterranean port of Haifa.
Prices were lifted earlier in the session after Chinese Premier Li Qiang said on Tuesday that China's economic growth would remain steady in Q2 and that he was confident the world's second-largest economy would meet its official growth target of 5% during 2024.
