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Oil prices rise after Israeli strikes on Rafah in Gaza

Oil prices rise after Israeli strikes on Rafah in Gaza Oil prices have risen (Getty Images)
Author: Maria Kholina

Oil prices rose after Israel struck Rafah in the Gaza Strip. Talks for a ceasefire with Hamas remain deadlocked, according to Reuters.

Brent crude futures rose by 0.3% to $83.56 a barrel, while West Texas Intermediate (WTI) futures rose by 0.31% to $78.72 a barrel.

"Oil prices opened up this morning, with some roadblocks in the ceasefire talks between Israel and Hamas leading market participants to price for geopolitical tensions to potentially drag for longer," said Yeap Jun Rong, market strategist at IG.

Meanwhile, a stronger dollar capped the rise in oil futures, as it makes crude oil more expensive for traders holding other currencies. The dollar index, which measures the dollar's value against six major currencies, rose to 105.18.

Last week, both contracts saw their biggest weekly losses in three months as the market focused on weak US employment data and possible Federal Reserve interest rate cuts.

Gaza situation

The Palestinian terrorist group Hamas agreed on May 6 to a ceasefire proposal by mediators in Gaza, but Israel said the terms did not meet its demands and continued to strike Rafah, planning to continue negotiations for a deal.

Israeli forces struck Rafah on the southern outskirts of Gaza from the air and ground, ordering residents to evacuate a part of the city that had been a shelter for more than 1 million displaced Palestinians.

The lack of resolution between the parties in the seven-month conflict has supported oil prices as investors fear that a regional escalation of war will disrupt crude oil supplies to the Middle East.