BANGKOK -- The price of oil fell Monday as a truce between Israel and the militant group Hamas that stopped fighting in the Gaza Strip appeared to hold despite a confrontation late last week.
Benchmark oil for January delivery was down 40 cents to $87.88 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. On Friday, the contract rose 90 cents to close at $88.28 a barrel on the Nymex after Israeli troops fired on crowds in Gaza surging toward a border fence, killing one Palestinian.
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Prior to the shooting, oil prices had been falling, thanks mostly to optimism that the cease-fire agreement between the two sides would prevent a broader conflict in the region that could disrupt crude supplies. The truce was struck last Wednesday to end to an eight-day Israeli offensive against Gaza militants who had fired rockets into Israel, but remains fragile.
Traders were also keeping a close eye on developments in Egypt, said oil analyst Stephen Schork. Egyptian President Mohammed Morsi on Sunday moved to grant himself near-absolute power, sparking street clashes between his supporters and opponents.
Brent, which is used to set prices for many international varieties of oil, fell 37 cents to $111.01 a barrel.
Other futures on the New York Mercantile Exchange:
-- Wholesale gasoline fell 0.5 cent to $2.715 a gallon.
-- Natural gas lost 6.4 cents to $3.837 per 1,000 cubic feet.
-- Heating oil was down 1 cent at $3.076 a gallon.