Oil drops after weekly gain amid diplomatic moves to contain Israel-Hamas conflict; Brent at $91/bbl
1 per cent week-on-week gains for the last two weeks, on the possibility of supply disruption in the Middle East — the world's biggest oil-supplying region — if the conflict were to spread. Back home, on the Multi Commodity Exchange (MCX), crude oil futures due for a November 17 expiry, were last trading 2.08 per cent lower at ₹7,213 per bbl, having swung between ₹7,213 and ₹7,343 per bbl during the session so far, against a previous close of ₹7,366 per barrel. Also Read: Domestic crude oil production at 2.4 MMT in September, imports rise 6.1% YoY: PPAC -The intensification of diplomatic efforts to prevent the Israel-Hamas conflict from further escalation could have calmed oil prices on Monday.
Aid convoys started to arrive in the Gaza Strip from Egypt over the weekend. However, Israel continued its bombardment of Gaza on Monday after launching air strikes over southern Lebanon overnight. -Elsewhere, US President Joe Biden last week announced the suspending of sanctions on Venezuela, after a Venezuelan government deal with the opposition.
This could bring exports back to the market, but the extent to which this could mitigate the impact of supply risks in the Middle East is unclear. -The benchmark US Treasury yield rose above 5 per cent to a 16-year high on Monday - which also weighed on crude prices. The surge in yields, which move inversely to prices, has been driven by an increase in government debt and supply of bonds around the world, as economic uncertainty leads investors to demand a greater premium to hold longer-dated bonds.
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