Oil prices fall after Israel reduces troop presence in Gaza

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Iranians attend the funeral procession for seven Islamic Revolutionary Guard Corps members killed in a strike in Syria, which Iran blamed on Israel, in Tehran on April 5, 2024.
Atta Kenare | Afp | Getty Images

U.S. crude oil futures fell Monday after Israel reduced its troop presence in Gaza.

The West Texas Intermediate contract for May delivery fell 76 cents, or 0.87%, to $86.15 a barrel. The June Brent contract lost $1, or 1.14%, to $90.13 a barrel.

Israel withdrew forces from the southern Gaza city of Khan Younis over the weekend, bringing its troop levels in the enclave to one of the lowest levels since the war with Hamas began last October. Negotiations on a ceasefire between Israel and Hamas are ongoing in Cairo.

U.S. crude and Brent gained more than 4% last week as tensions mounted between Israel and Iran, raising renewed fears that a direct confrontation between the two would lead to regional conflict that disrupts crude supplies.

A top Iranian military advisor warned Israel over the weekend that its embassies could be targeted. Tehran has blamed Israel for a missile strike last Monday against its consulate in Damascus, which killed top Iranian commander Mohammad Reza Zahedi.

“None of the embassies of the (Israeli) regime are safe anymore,” said Gen. Rahim Safavi, an advisor to Iran’s supreme leader Ayatollah Ali Khamenei.

Ukraine’s campaign of drone attacks on Russian oil refineries also lifted crude prices, with global supplies already tightening due to robust economic growth and OPEC+ production cuts.

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