Oil held its biggest drop in almost two weeks as discussions on a possible cease-fire in the Middle East reduced the risk premium for crude.
West Texas Intermediate traded below USD83 a barrel after falling by 1.5% on Monday, with global benchmark Brent closing above USD88. The gap between Israel and Hamas on an agreement to release hostages has narrowed in recent weeks and a deal was close, according to two people familiar with the deliberations.
Crude has risen this year on conflicts in Ukraine and the Middle East and OPEC+ supply curbs. While time spreads continue to signal strength, uncertainty over US monetary policy and high inventories in product markets including diesel are weighing on the outlook for demand. – Bloomberg
