- Oil prices fell as reports on Monday indicated that Israel and Hamas could engage in cease-fire talks this week.
- Secretary of State Antony Blinken said the US would push for both sides to reach a truce.
- Geopolitical conflict has driven up the price of oil and other commodities this year.
Oil prices dropped Monday with energy markets eyeing fading geopolitical risks as Israel and Hamas reportedly move toward cease-fire talks.
On Monday morning, West Texas Intermediate dropped over 1% to $83 per barrel, while Brent crude fell around 2.3% to $87.4 on reports that Israel and Hamas could negotiate a cease fire potentially this week.
According to The New York Times, Israeli officials said Israel is open to sitting down with Hamas, reducing its demand for the number of hostages returned to 33 from 40. Cease-fire discussions could begin as soon as Tuesday if both parties agree to meet Cairo, the report said.
Meanwhile, United States Secretary of State Antony Blinken said on Monday in Saudi Arabia that the US is calling on Hamas to promptly accept an Israeli proposal while ramping up efforts to help both parties reach a bilateral truce, especially with the threat of an Israeli attack on Gaza's southernmost city of Rafah rising, Reuters reported.
As the Middle East conflict and Russia-Ukraine rage on, commodities, especially oil, have been riding high. The World Bank said in a report this month that a resurgence in commodity prices after a two-year period of declines has raised the risk that the world economy will be dealing with inflation for a lot longer.
The largest group of oil producing countries— OPEC+ —has been cutting their output since last December, leading Brent crude prices to rise 22.9%.
Analysts say they see as much as a 20% surge for stocks in the sector as conflict and supply disruptions keep prices elevated.
Meanwhile, economic guru David Rosenberg predicts that surging geopolitical tensions will ignite energy stocks, but warns that a slump in overall demand could throw a wrench in the works.