Oil prices fall on ceasefire hopes in Gaza

Oil prices decreased on Monday amid ceasefire hopes in the Middle East and growing uncertainties over the timing of the US Federal Reserve’s (Fed) interest rate cuts.

International benchmark Brent crude traded at US$87.45 per barrel in morning trade in London, a 0.86% decrease from the closing price of US$88.21 per barrel in the previous trading session.

The US benchmark West Texas Intermediate (WTI) traded at US$83.11 per barrel at the same time, a 0.88% fall from the previous session that closed at US$83.85 per barrel.

The likelihood of a ceasefire in

Gaza increased as US Secretary of State Antony Blinken arrived in Saudi Arabia to discuss this possibility on Monday, drawing prices down at the start of the week.

Blinken will discuss efforts to reach a ceasefire in Gaza that guarantees the release of hostages while acknowledging that Hamas is the stumbling block between the Palestinian people and the cease-fire, State Department spokesman Matthew Miller revealed in a statement.

He is also anticipated to discuss the path toward an independent Palestinian state that secures Israel's security, measures to bring about long-term peace and stability in the region by preventing the conflict from spreading, and an increase in humanitarian aid for Gaza.

The possibility of a cease-fire in the region, home to major oil trade routes, supported price falls.

Additionally, uncertainties over when the US Federal Reserve (Fed) will start interest rate cuts continue to influence oil prices.

Money markets are still waiting for the US Fed to implement its first interest rate cut in the fourth quarter of the year, despite data released last week indicating otherwise in the US.