Oil prices little changed as U.S. moves to replenish reserve, Gaza cease-fire still uncertain

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Hundreds of Palestinians, including women and children living in east part of Rafah, migrate to the west part of the Khan Yunis with their few belongings loaded on vehicles following the Israel’s announcement on the evacuation of neighborhoods, in Khan Yunis, Gaza on May 6, 2024. 
Ashraf Amra | Anadolu | Getty Images

Crude oil futures fell Tuesday as the course of the war in Gaza remains uncertain.

Israel’s war cabinet unanimously voted to continue military operations in Rafah after rejecting a cease-fire proposal accepted by Hamas on Monday. Israeli forces seized the Rafah border crossing, sparking condemnation from Egypt, which has been mediating cease-fire talks.

Here are today’s energy prices:

  • West Texas Intermediate June contract: $78.32, down 16 cents, or 0.2%. Year to date, U.S. crude oil has gained 9.3%.
  • Brent July contract: $83.16 a barrel, down 18 cents, or 0.22%. Year to date, the global benchmark has gained about 8%.
  • RBOB Gasoline June contract: $2.57 a gallon, down 0.8%. Year to date, gasoline futures have gained 22%.
  • Natural Gas June contract: $2.21, up 0.77%. Year to date, gas has fallen 12%.

Oil prices have been volatile amid geopolitical risk in the Middle East for months now, even though no major disruption to crude supplies has occurred. Chevron CEO Mike Wirth said prices have remained in a relatively stable band but risk remains to the upside for oil due to the war’s proximity to the Strait of Hormuz — the most important global transit point for crude.

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WTI vs. Brent.

“A lot depends on the course of events here, we’re all hoping for an end to the conflict,” Wirth told CNBC at the Milken Institute’s Global Conference in Los Angeles on Monday. The market remains finely balanced between supply and demand, the CEO told CNBC after Chevron reported earnings in April.

An Israeli delegation is due in Cairo to continue cease-fire negotiations “to exhaust the possibility of reaching an agreement under conditions acceptable to Israel,” according a statement from Prime Minister Benjamin Netanyahu’s office.

A truce in the seven-month war remains elusive, said Tamas Varga, analyst at oil broker PVM. It is unclear whether a cease-fire would halt Houthi militant attacks on shipping in the Red Sea, the most material risk to oil so far, Varga said.

“And it would take a bold investor to bet on it,” Varga told clients in a note Tuesday.

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