Oil prices rise after Gaza deaths heighten tensions

Price moves

• West Texas Intermediate crude
  CL00,
  +1.94%
  for April delivery
  CL.1,
  +1.94%

  CLJ24,
  +1.94%
  rose $1.24, or 1.6%, to $79.50 a barrel on the New York Mercantile Exchange.

• May Brent crude
  BRN00,
  +1.72%

  BRNK24,
  +1.72%,
  the global benchmark, was up $1.25, or 1.5%, at $83.16 a barrel on ICE Futures Europe.

Market drivers

“The oil market traded with modest gains in the early trading session today with reports of fresh tensions in Gaza pushing up risk sentiment,” said Ewa Manthey and Warren Patterson, commodity strategists at ING, in a note.

Investors are also awaiting a decision by members of OPEC+ — made up of the Organization of the Petroleum Exporting Countries and its allies — on whether to extend voluntary production cuts into the second quarter.

OPEC+ countries were considering an extension of the cuts, which amount to 2.2 million barrels a day, into the second quarter, Reuters reported earlier this week, with some officials pointing to the prospect of an extension to year-end.

“Sticking to the voluntary production cuts until the end of the year would be a strong signal and should therefore be seen as price-positive. This is because the oil market would then remain tight until year-end,” said Carsten Fritsch, commodity strategist at Commerzbank, in a note.

”An extension only into the second quarter, on the other hand, is likely to be priced in and should therefore not move prices significantly,” he wrote.