Oil prices retreated at the start of the week on signs that there is a possibility of a ceasefire between Hamas and Israel.

Benchmarks began the week shedding some $1 per barrel, which pushed Brent crude below $90 and West Texas Intermediate below $86, after Israel moved some troops out of Gaza during the weekend.

“It appears the catalyst is Israel saying it has withdrawn all troops except one brigade from the Southern Gaza strip, likely in response to growing international pressure and to deescalate tensions after it killed senior Iranian commanders in Syria last week,” IG analyst Tony Sycamore told Reuters.

The Iranian response to the Israeli strike on Tehran’s consulate in Damascus, however, is still a factor for prices, and a bullish one, at that, after President Ebrahim Raisi vowed there would be revenge.

Fundamental factors are also very much still in play, with one Mizuho Bank analyst telling Bloomberg that geopolitical developments have only served to highlight the tight supply situation in oil markets.

“Oil’s upside volatility remains very much present, and that’s to a large part thanks to geopolitics amplifying supply shortfalls elsewhere,” Vishnu Varathan said.

The price decline also comes in anticipation of three closely watched reports about the state of the global oil market coming out this week. The Energy Information Administration’s Short-Term Energy Outlook is first, due out on Tuesday. Then comes OPEC’s latest Monthly Oil Market Report, scheduled for Thursday, and the International Energy Agency’s Oil Market Report a day later.

The latter two reports will probably attract the most attention due to their growing divergence that led to vocal criticism of the IEA by senior OPEC figures. They accused the agency of betraying its original purpose and turning into a “cheerleader” for the energy transition as a group of U.S. Republican lawmakers called.

By Irina Slav