WTI inches up to near $86.30 as ceasefire talks between Israel and Hamas collapse

West Texas Intermediate (WTI) oil price rebounds after a two-day decline, edging up to nearly $86.30 per barrel during Tuesday's European trading session. The surge in Crude oil prices followed the failure of the latest ceasefire negotiations between Israel and Hamas in Egypt on Monday.

Earlier discussions for a ceasefire had halted a multi-session rally, causing WTI to break its six-day winning streak. This was due to the anticipation that geopolitical tensions might ease. However, Israeli Prime Minister Benjamin Netanyahu announced on Monday that Israel intends to carry out its plans to invade the Rafah enclave in Gaza, without specifying a date. Additionally, a senior Hamas official stated that they have rejected the latest ceasefire proposal put forward by Israel during the talks in Cairo.

The ongoing conflict carries the heightened risk of drawing in other regional countries, notably Iran, a significant supporter of Hamas and the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC). An Iranian retaliation to the suspected Israeli attack on its consulate in Syria last week could potentially embroil the oil market in the conflict. However, Israel has not officially claimed responsibility for the attack.

Mexico's state energy company, Pemex, plans to reduce Crude exports by at least 330,000 barrels per day (bpd) in May. This decision will affect customers in the United States (US), Europe, and Asia, leading to a reduction in supply by a third. The move follows Pemex's directive to its trading arm, PMI Comercio Internacional, to withdraw 436,000 bpd of Maya, Isthmus, and Olmeca crudes this month. This decision aims to meet the needs of domestic refineries as Pemex aims for energy self-sufficiency.