Investing.com — Oil prices rose on Monday after Saudi Arabia increased its official selling price for crude in June for most regions and media reports said that the latest round of ceasefire talks between Israeli and Hamas delegates had ended with no agreement being reached.

expiring in July gained 0.7% to $83.55 a barrel, while West Texas Intermediate crude futures edged up by 0.8% to $78.38 per barrel by 09:16 ET (13:16 GMT).

Both contracts slid between 6.6% and 7.5% last week, their worst weekly performance since October.

The sharp losses from the prior week were fueled in part by the prospect of worsening demand, especially as the U.S. economy appeared to be slowing and interest rates were seen remaining higher for longer to combat stubborn inflationary pressures.

Softer-than-expected data on Friday added to these fears of weakening demand. Mitigating these losses, however, were renewed bets on a September rate cut by the Federal Reserve, which sparked heavy losses in the U.S. dollar. The decline in the greenback offered some relief to dollar-denominated crude prices. 

Elsewhere, the chances of an abatement in the war between Israel and Hamas now appear to be slim, with reports saying that weekend truce talks in Egypt hit an impasse. According to the reports, Hamas is demanding an end to the war in return for freeing Israeli hostages. But Israel has ruled out such an offer and has been warning that it is preparing to send troops into Rafah, a city in southern Gaza.

Expectations of unrest in the Middle East, and possible disruptions to crude supplies out of the region, subsequently remained a key source of support for oil prices on Monday.

Meanwhile, Saudi Arabia announced that it would raise the official selling price for its crude to Northwest Europe, the Mediterranean and Asia in June, in a sign that one of the world’s largest oil-producing nations expects to see resilient demand during the summer. 

Ambar Warrick contributed to this report.

By Georgina McCartney

HOUSTON (Reuters) -As Big Oil returns this week to the industry’s annual showcase for offshore energy projects and equipment in Houston, deepwater discoveries off Guyana, Namibia and the U.S. Gulf Coast will take the spotlight.

Offshore exploration had dimmed after the U.S. shale boom ushered in new and cheaper-to-tap supplies of oil, and as past offshore cost overruns pushed deepwater projects onto the industry’s backburner.

Newer deepwater projects have the attributes oil and gas companies are looking for: longer-term production, lower breakeven costs, big resource potentials and lower carbon emissions, said Pablo Medina, head of new ventures at energy consultants Welligence.

“Deepwater is back in vogue,” Medina said.

Capital spending on all-new deepwater drilling is poised to hit a 12-year high next year, predicts consultancy Rystad Energy. Investment in all-new and existing deepwater fields could hit $130.7 billion in 2027, a 30% jump over 2023, it said.

“The return of offshore and deepwater operations is going to be a big topic at OTC, and Namibia is going to be talk of the show,” said James West, senior managing director at financial firm Evercore, referring to the recent series of oil finds off the west African coast.

FASTER PAYBACK PERIODS

With prices above $70 a barrels, energy producers can expect a return on their multi-billion-dollar deepwater projects in six years, a relatively short period considering the wells’ longer lives compared with shale, explained Matt Hale, vice president of supply chain research at Rystad, at the Rystad Energy Forum in Houston last month.

Deepwater resources also offer lower carbon emissions intensity than shale and other tight oils, averaging 2kg of carbon dioxide per barrel less than shale, Hale said. That appeals to investors seeking safer bets as environmental regulations tighten.

Enthusiasm for offshore has climbed with discoveries and technology breakthroughs. Namibia’s Mopane is forecast to hold as much as 10 billion barrels of oil, Portuguese oil company Galp Energia said last month.

Chevron (NYSE:) and TotalEnergies (EPA:) have made a breakthrough in ultra-high pressure environments with their Anchor project in the Gulf of Mexico, the world’s first to operate at once-unfathomable 20,000 pounds per square inch (psi) pressures. The Anchor platform is preparing to start production off the Louisiana coast, and at its peak will produce up to 75,000 barrels per day (bpd) of crude and operate for 30 years.

The Stabroek block off the coast of Guyana has demonstrated the potential for low cost production that rivals the best deepwater fields elsewhere.

Over the next six years, more than half of its recoverable resources are expected pump at a breakeven price of less than $30 per barrel, according to Rystad. That is comparable to the breakeven on about 80% of deepwater recoverable resources off Norway, Rystad estimates.

Renewed interest in deepwater has boosted demand and results for offshore drilling contractors. Rates for some vessels have surpassed $500,000 a day and contract durations are lengthening as vessel supply dwindles.

“We are reaching this crescendo over the next 18 months or so where the (deepwater rig) market will level out,” said Leslie Cook, upstream supply chain analyst at consultants Wood Mackenzie.

Investing.com– Gold prices rose in Asian trade on Monday, capitalizing on a recent drop in the dollar as softer-than-expected U.S. payrolls data saw traders increase bets on eventual interest rate cuts by the Federal Reserve. 

But gains in gold were held back by improved risk appetite in the wake of Friday’s data, as investors pivoted into more risk-exposed assets such as stocks.

rose 0.4% to $2,310.05 an ounce, while expiring in June rose 0.4% to $2,318.70 an ounce by 00:31 ET (04:31 GMT). 

Gold retakes some ground as rate cut bets reemerge 

Gains in gold also came after the yellow metal fell sharply from record highs over the past three weeks. Fears of high-for-longer rates and waning safe haven demand were the biggest weights on gold in recent sessions. 

But the yellow metal took some relief from a drop in the , which lost 0.8% last week. The dollar’s losses were driven chiefly by Friday’s payrolls reading, which sparked increased bets that the Fed will begin cutting rates by September. 

While a cooling labor market gives the Fed some impetus to trim rates, its main point of contention remains the issue of sticky inflation. Inflation was seen moving further above the Fed’s annual 2% target in the first quarter, which in turn saw traders price out most expectations for rate cuts this year. 

High rates bode poorly for gold, given that they increase the opportunity cost of investing in the yellow metal.

Focus this week is on a string of addresses from top Fed officials, for more cues on interest rates.

Other precious metals were somewhat mixed on Monday. fell 0.3% to $962.60 an ounce, while surged 1.7% to $27.130 an ounce. 

Copper prices rise on weaker dollar, in sight of 2-year highs

Among industrial metals, copper prices rose on Monday, moving back towards two-year highs as metal prices benefited from a weaker dollar. 

on the London Metal Exchange rose 1.7% to $9,930.0 a ton, while rose 0.5% to $4.5888 a pound.

Both contracts remained in sight of two-year peaks amid expectations of tighter markets on metal sanctions against Russia, as well as hopes of improving demand in top importer China.