Oil Rises on Gaza Ceasefire Rejection and US Stock Data

Oil Rises on Gaza Ceasefire Rejection and US Stock Data
Oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia, on June 4, 2023. (Alexander Manzyuk/Reuters)

LONDON—Oil prices gained ground on Thursday as investors considered the impact of Israel’s rejection of a ceasefire offer from Hamas and unexpected drops in U.S. fuel stocks.

Brent crude futures rose 57 cents, or 0.72 percent, to $79.78 a barrel by 1043 GMT. U.S. West Texas Intermediate crude futures were up 47 cents, or 0.64 percent, at $74.33.

The Brent benchmark is approaching $80 a barrel again after making gains in each of the previous three sessions.

“The recent strength is the result of the Israeli reply to the counter offer from Hamas to the original peace plan, which ensures that hostilities in the Red Sea will continue unabated,” said PVM analyst Tamas Varga.

Israeli Prime Minister Benjamin Netanyahu rejected the latest Hamas ceasefire offer and return of hostages held in the Gaza Strip, but U.S. Secretary of State Antony Blinken said there was still room for negotiation.

A Palestinian Hamas delegation led by senior member Khalil Al-Hayya was due to travel to Cairo on Thursday for ceasefire talks with Egypt and Qatar.

Wider Middle East tensions have kept the market on edge since October, with limited progress in talks to end the Gaza conflict.

A stronger than expected drawdown in U.S. gasoline and middle-distillate stocks also buoyed the oil market.

Distillate stockpiles fell by 3.2 million barrels to 127.6 million barrels, Energy Information Administration data showed, versus expectations for a 1 million barrel drop. Gasoline stocks fell by 3.15 million barrels, compared with analyst forecasts of a build of 140,000 barrels.

The draw in fuel stocks, combined with a rise in crude stocks, was a sign of U.S. refinery maintenance, Mr. Varga said.

“Ongoing U.S. refinery maintenance, together with Europe being short on diesel, can help maintain the positive sentiment for now,” he added.

By Robert Harvey