Oil futures fell on Monday on a report the US and Venezuela could soon reach a deal to ease sanctions on Venezuela if a presidential election date is set, while traders see the Israel-Hamas conflict not affecting crude supplies in the short term.

Brent futures were down 59 cents, or 0.67%, at $90.27 a barrel at 532 GMT. US West Texas Intermediate (WTI) crude fell by 0.29 cent, or 0.37%, to $87.30 a barrel.

The US and Venezuelan governments were getting ready to sign a pact in Barbados as early as on Tuesday to ease US sanctions on Venezuela’s oil industry in return for a competitive, monitored presidential election in Venezuela next year, according to media reports.

Easing sanctions on Venezuela’s oil industry could result in increased oil supply.

Traders were optimistic the war between Israel and Palestinian Islamist Hamas would remain confined to Gaza. “It’s more of the same on Monday in terms of the conflict in the Middle East being contained from affecting crude oil supplies,” said John Kilduff, Partner with Again Capital LLC.

Both oil benchmarks had climbed nearly 6% on Friday, taking Brent 7.5% higher on the week and WTI up 5.9%.

Israeli air strikes on Gaza intensified on Monday, after diplomatic efforts to arrange a ceasefire in southern Gaza failed.

Published in The Express Tribune, October 17th, 2023.

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