Oil prices eased after last week's gains after Iran's foreign minister indicated a diplomatic solution to the conflict between Israel and Hamas was imminent. Trading was quiet as many Asian markets were closed for the Lunar New Year holiday.
Brent crude fell 0.8% to below $82 a barrel, after rising 6.3% last week, while West Texas Intermediate crude traded near $76.
Iranian Foreign Minister Hossein Amir Abdullahian held talks in Beirut and discussed the possibility of releasing Israeli hostages, including senior Hamas officials. “Developments in Gaza are moving towards a diplomatic solution,” he said, giving no details on timing.
Meanwhile, Israeli Prime Minister Benjamin Netanyahu insisted Sunday on leading an Israeli military operation in the southern city of Rafah.
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Oil has traded within a range of around $10 for most of this year's session as tensions in the Middle East limit its impact.
Partly because of global supply and weak demand expectations – especially in China, the second largest consumer.
Production from the Permian Basin in West Texas and New Mexico — which helped export unprecedented volumes to the U.S. last year — is expected to hit another record this year. Production is expected to rise roughly 5% to 6.4 million barrels per day by the end of 2024, major pipeline operator Plains All American Pipeline LP said in its fourth-quarter results report.
Meanwhile, there are additional downside risks to China's demand outlook, Goldman Sachs Group analysts said in a note, citing rising electric vehicle sales and conversations with domestic consumers.
This week, traders look to OPEC and the International Energy Agency's monthly reports for more signs of supply and demand.