Despite intensifying tensions in the Middle East, oil prices remained relatively stagnant Monday, exhibiting minimal movement after a week that saw a significant 6% rally. The West Texas Intermediate (WTI) contract for March had a marginal increase of just 1 cent, reaching $76.85 a barrel, while the Brent contract for April dropped slightly to $81.96 a barrel, down 23 cents or 0.28%.
Last week’s rise in prices followed Israel’s rejection of Hamas’ ceasefire proposal and its commitment to continue the attacks, particularly targeting the southern city of Rafah along the border with Egypt. Israeli Prime Minister Benjamin Netanyahu confirmed the nation’s determination to confront Hamas in Rafah, dismissing advice not to enter the city.
“We’re going to do it. We’re going to get the remaining Hamas terrorist battalions in Rafah, which is the last bastion, but we’re going to do it,” Netanyahu said in an interview with ABC’s “This Week” that aired on Sunday. He emphasized Israel’s intention to ensure the safe passage of civilians out of the embattled southern city.
However, despite these geopolitical turmoils, oil prices have struggled to break out of a $10 trading range. Tamas Varga, an analyst with oil broker PVM, said that while last week’s rally was remarkable, a more substantial increase in prices would require an extreme scenario, such as a direct U.S. attack on Iran, resulting in a disruption of crude supplies.
Varga’s assessment displays broader market sentiment, which seems to be cautiously monitoring geopolitical developments in the Middle East for potential impacts on oil production and distribution. While conflicts in the region historically have had the potential to significantly disrupt oil markets, investors are currently looking for clearer signals of supply disruptions before committing to further price increases.