Oil prices fell in early Asian trading on Monday, giving up gains achieved on Friday, as peace talks between Israel and the Palestinian Islamic Resistance Movement (Hamas) in Cairo eased fears of the expansion of the scope of the conflict in the Middle East.
US inflation data also reduced expectations of a reduction in interest rates soon.
Brent crude futures fell by one dollar, or 1.1 %, to $88.50 per barrel, before rising to $88.55 by 0149 GMT. West Texas Intermediate crude futures also fell 84 cents, or one percent, to $83.01 per barrel.
Tony Sycamore, an analyst at IG Market, said that the intensification of mediation efforts in a truce agreement between Israel and Hamas eased geopolitical tensions and contributed to the weak opening of markets on Monday.
Data on Friday showed that inflation in the United States increased 2.7 % in the twelve months to March, exceeding the central bank’s target of 2 %.
Low inflation enhances the possibility of lowering interest rates, which in turn enhances economic g
rowth and demand for oil.
On the other hand, the rise of the dollar enhances expectations that interest rates will remain high for a longer period, and the rise of the dollar makes oil more expensive for holders of other currencies.
Source: National Iraqi News Agency