Oil prices dropped on Monday as Saudi Arabia, Egypt, Bahrain and the United Arab Emirates severed diplomatic ties with neighboring Qatar, according to Bloomberg MarketWatch.
On the New York Mercantile Exchange, July West Texas Intermediate crude fell 26 cents, or 0.6%, to settle at $47.40 a barrel. August Brent crude, the global benchmark, slipped 48 cents, or 1%, to end trading at $49.47 a barrel on the London ICE Futures Exchange.
“Generally, increased tensions in the Middle East props up oil prices with a fear bid, but the dynamic of this Qatar issue is different because it is largely between Saudi Arabia and Iran,” said Tyler Richey, co-editor of the Sevens Report.
The unusual move to cut ties raises uncertainty about oil production in the Middle East. Qatar is an OPEC member but isn’t a significant crude producer.
The Energy Information Administration will issue its monthly short-term energy outlook report on Tuesday.
Back on the New York Mercantile Exchange, July natural gas fell 1.7 cents, or 0.6%, to end trading at $2.982 per million British thermal units.