• Crude oil prices received upward support due to the Palestine-Israel conflict.
• The escalation of the Mid-East tension could involve Iran and Saudi Arabia.
• US oil giant Chevron is instructed to cease production at its Tamar natural gas field.
• The sentiment around rate hikes fades due to the dovish remarks made by Fed officials.

Western Texas Intermediate (WTI) oil price experienced its most significant increase in six months, reaching $86.01 per barrel on Monday. However, it has since pulled back to $84.70 at the time of writing on Tuesday. The recent surge could be attributed to the Middle East conflict.

The continued tension between Hamas and Israel is causing apprehensions about the destabilization of the Crude Oil supply, which could result in upward support for Crude oil prices. The escalation of this conflict has the potential to extend into additional geopolitical tensions in the Middle East and involve neighboring countries such as Iran and Saudi Arabia.

Moreover, the US oil giant Chevron is instructed by the Israeli government, to temporarily cease production at its Tamar natural gas field located just off the northern coast of Israel.

The US Dollar Index (DXY) extends its losses on the fifth successive day, trading around 106.00 at the time of writing. The US Dollar (USD) failed to register significant gains despite the robust US Nonfarm Payroll data released on Friday.

This lack of appreciation can be attributed to a decline in US Treasury yields on Monday, with the 10-year US Treasury bond yield standing at 4.64% as of the current press time.

Moreover, the remarks made by Federal Reserve (Fed) officials overnight prompted investors to downplay the probability of additional rate hikes, resulting in a further drop in US bond yields. Consequently, this development is perceived as eroding the strength of the Greenback.

Dallas Fed president Lori Logan suggested that there might be less necessity to raise the Fed funds rate, and Fed Vice Chair Philip Jefferson acknowledged the importance of the central bank proceeding cautiously with any additional increases in the policy rate.

The upcoming FOMC meeting minutes scheduled for Wednesday are expected to impact the likelihood regarding the Federal Reserve's next policy move, which could potentially influence demand for the Greenback.

Market participants await the US Core Producer Price Index (PPI) on Wednesday and the Consumer Price Index (CPI) on Thursday, as these events hold a pivotal role in assessing inflationary trends and economic conditions within the United States.