Oil prices started the week lower in Asian trade on Monday, after Israel said it had “concluded” a series of attacks in southern Gaza, and concerns about supply from the Middle East eased slightly.
Brent crude futures were down 31 cents, or 0.4%, at $81.88 a barrel at 05:20 GMT, while WTI crude oil futures were down 31 cents, or 0.4%, at $76.53 a barrel.
Geopolitical risks, including concerns about the Israeli-Palestinian conflict spreading across the region and a potential oil supply disruption in the Middle East, pushed prices up nearly 6% last week.
The Israeli army said on Monday that the “serial attack” on southern Gaza was now “completed”.
Logistical disruptions in the Red Sea continued to be at the center of investors’ concerns. The UK Maritime Trade Operations (UKMTO) agency said early on Monday it had received a report that two missiles had attacked a ship south of Al Mukha in Yemen.
Iranian-backed Houthi militants in Yemen have responded by drone and missile attacks on Israeli military actions in Gaza since mid-November. This action shook up global shipping and led many companies to choose a longer, more expensive route around Africa rather than the Red Sea.
While supply concerns remained relatively high in the Middle East, news from the USA eased concerns.
US energy firms have ramped up oil and gas drilling rigs to the highest level since mid-December, potentially signaling a rise in production. Domestic production reached a record high of 13.3 million barrels per day (bpd) last week.
Demand concerns continued, with a Federal Reserve official saying there was no interest in a rate cut.
High interest rates slow economic growth, which reduces the oil demand.
Mainland China’s financial markets are closed for the Lunar New Year holiday and trading will resume on Monday, February 19. Hong Kong trading will resume on February 14.
Trade in Asia is expected to be weak as much of the region, including China, Hong Kong, Japan, South Korea, Singapore, Taiwan, Vietnam, and Malaysia, is closed for holidays.