Investing.com– Oil prices fell in Asian trading Monday as investors took some profits after stellar gains over the previous week, with attention now turning to other developments in the war between Israel and Hamas and indexes from leading industry reports.
Trading volumes were low due to public holidays across most of Asia, marking the Chinese New Year.
expiring in April fell 0.5% to $81.78 per barrel, while it fell 0.6% to $76.35 per barrel at 8:20 p.m. ET (01:20 GMT). Both contracts jumped about 5-6% last week.
Oil prices rose sharply after Israel rejected a Hamas ceasefire proposal and continued its deadly airstrikes on the Gaza Strip. The move reflects a slight de-escalation of the conflict and has seen traders begin to factor in a higher war-related risk premium.
The war between Israel and Hamas has been a key point of support for oil in recent months, especially as traders have begun to assess the possibility of increased disruptions to global oil supplies from the conflict.
Attacks by the Iran-aligned Houthi group in the Red Sea have also caused disruptions to maritime activity. Markets were now awaiting other signals from the region.
Concerns over the Middle East have seen oil prices rise largely beyond the recovery in U.S. production, which hit record levels in February after cold-related production disruptions.
But U.S. fuel supplies have been restricted by the closure of several refiners for maintenance. had climbed nearly 9% the previous week, although whether that trend would persist remained uncertain given that U.S. fuel demand also weakened in cold weather.
OPEC and IEA reports; American inflation on track this week
The Organization of the Petroleum Exporting Countries is expected to release its report on Tuesday, while the International Energy Agency will release it on Thursday.
Markets were somewhat uncertain about whether both countries would maintain their oil demand forecasts for 2024 and 2025, given that demand is expected to come under some pressure as U.S. interest rates remain higher for longer in 2024.
Further guidance on US interest rates is also expected from key inflation figures due on Tuesday. U.S. inflation is expected to remain stable in January, a scenario that gives the Federal Reserve more impetus to keep rates high for longer.