Oil prices fall more than 1% as Secretary of State Blinken pushes for Gaza cease-fire

U.S. Secretary of State Antony Blinken attends a Joint Ministerial Meeting of the GCC-U.S. Strategic Partnership to discuss the humanitarian crises faced in Gaza, in Riyadh, Saudi Arabia, April 29, 2024.Evelyn Hockstein | Reuters

Crude oil futures fell by $1 on Monday as the U.S. Secretary of State made a renewed diplomatic push in the Middle East to secure a cease-fire in Gaza and head off an Israeli offensive against Rafah.

A successful cease-fire agreement would likely further ease the geopolitical risk premium factored into oil prices on fears that the war in Gaza could trigger a broader conflict in the Middle East that disrupts crude supplies.

Here are Monday's closing energy prices:

• West Texas Intermediate June contract: $82.63 a barrel, down $1.22, or 1.45%. Year to date, U.S. oil has gained 15.3%.
• Brent June contract: $88.40 a barrel, down $1.10, or 1.23%. Year to date, the global benchmark has risen nearly 14.75%.
• RBOB Gasoline May contract: $2.75 per gallon, down 0.41%. Year to date, gasoline is up about 31%.
• Natural Gas May contract: $2.05 per thousand cubic feet, up 6.45%. Year to date, gas is down about more than 18%.

Secretary of State Antony Blinken held talks with Arab leaders in Saudi Arabia on Monday. He will travel to Israel and Jordan on Tuesday.

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WTI vs. Brent

Israel is waiting for Hamas to respond to a cease-fire proposal in which 33 hostages would be released in exchange for Palestinian prisoners, an Israeli official told NBC News. A Hamas delegation is expected in Cairo on Monday to discuss the cease-fire proposal.

“With little other fresh news, the possible cooling of the Gaza environment sees oil prices slip,” wrote John Evans, analyst with oil broker PVM, in a note on Monday.

Evans said heating oil and distillates are also weighing on crude oil prices as stocks of the refined products expand and demand shrinks. Natural gas is also challenging the market, with Exxon and Chevron reporting a decline in profits on Friday due partly to a collapse in prices amid a supply glut.

Phil Flynn, senior market analyst at the Price Futures Group, said it looks like the oil market and refined products are “coiling for a potential big move.”

“We think the risk of an upside move is more likely,” Flynn said in a note Monday.