Oil Prices Remains Steady Amid Hope To Halt Gaza War During Antony Blinken’s Visit

Global oil prices become broadly steady as investors wait to see prospects of halting the Gaza war during the ongoing trip of U.S. diplomat Antony Blinken to Middle East.

Blinken met Saudi Arabia’s de-facto ruler on Monday. Palestinians hope the visit will bring a truce against Israeli threatened attacks on Rafah, a border city where nearly half of the Gaza population has taken shelter after the Hamas attack on Israel on October 7.

Hamas received a ceasefire offer last week from mediators from Qatar and Egypt; but, the militants have not responded, claiming they need further assurances that the four-month-old conflict will end.

The Houthis, who are supported by Iran and have disrupted international oil trade lines with their attacks on maritime vessels, are the target of an ongoing US effort in Yemen.

The Senior market analyst expects the continued ailing oil prices, if de-escalation efforts in the Middle East crisis remain unfulfilled. However, limited price gains are a problem with the demand forecast.

According to analysts, a combination of signs such as China”s economic difficulties and forecasts of “higher for longer” interest rates in the US and other countries, might limit demand.

CMC Markets analyst Leon Li expects that it would be “difficult to return to previous highs” under the run of strong economic indicators from the U.S. would likely lose steam. “Layoffs are still increasing. This means that in the long term, the (oil) demand will decline,” Li said.

According to a report from BMI experts, they anticipate that oil prices will climb by a mild 3.4% and that the market would remain generally balanced throughout the year. “However, we see risks to the outlook both to the upside and the down, due to considerable uncertainties surrounding the strength of the global economy, the fallout from the unfolding Red Sea crisis and the evolution of OPEC+ policy, amongst other things,” they added further.