The price of oil slipped back below 31 dollars a barrel here Tuesday after Israelis and Palestinians agreed at the Sharm El-Sheikh summit to try to end three weeks of bloodshed.
The price of benchmark Brent North Sea crude oil for December delivery fell back to 30.80 dollars a barrel, having risen as high as 31.58 dollars earlier in the day over concern about the Middle East peace process.
The spiralling violence between Israel and the Palestinians had sent oil prices skyrocketing.
Market players had feared the situation could degenerate into a repeat of the 1973 oil embargo by regional Arab nations which jolted economies around the world into stagflationary recession.
At Sharm El-Sheikh, US President Bill Clinton said both parties had agreed to try to calm the situation, end violence and ensure security. Analysts said the market was still taking a cautious view.
"We have to wait for the reaction of Palestinians" to the agreement, said GNI analyst Lawrence Eagles. "If the Palestinians don't have a good reaction, it will affect the prices. But if the reaction is good, oil prices could go under 30 dollars."
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)