Oil prices fell in early Asian trade on Monday after Israel said it had “concluded” a series of strikes in southern Gaza, slightly easing concern about supply from the Middle East.
Brent crude futures were down 43c, or 0.5%, at $81.76 a barrel, while US West Texas Intermediate (WTI) crude futures were 46c, or 0.6% lower, at $76.38 a barrel at 1.35am GMT.
Geopolitical risks, including a feared broadening of the Israel-Palestinian conflict across the region and potential oil supply disruption in the Middle East, pushed prices up by about 6% last week.
The Israeli military said on Monday it had conducted a “series of strikes” on southern Gaza that have now “concluded”, days after Israeli Prime Minister Benjamin Netanyahu rejected a ceasefire proposal from Hamas.
While supply concerns in the Middle East remained relatively heightened, news from the US eased some worry.
US energy firms increased oil and natural gas rigs to their highest since mid-December, potentially signalling an increase in output. Domestic production returned last week to a record 13.3-million barrels a day (bbl/day).
Demand concerns remained, as a Federal Reserve official said she had no interest in recommending an interest rate cut, adding to the chorus on further reining in inflation. Higher interest rates slow economic growth, which curbs oil demand.
Trading in Asia hours is expected to be thin as most of the region, including China, Hong Kong, Japan, South Korea, Singapore, Taiwan, Vietnam and Malaysia, are closed for holidays.
Mainland China’s financial markets are closed for the Lunar New Year holiday and will resume trade on Monday, February 19. Hong Kong trade will resume on February 14.