Oil prices fell on Thursday after Israel and Hamas agreed on the first phase of a plan to end the war in the Gaza Strip, easing geopolitical tensions in the Middle East. At the same time, a strengthening US dollar put pressure on commodities, Reuters reported, writes UNN.
Details
Brent crude futures fell 34 cents, or 0.51%, to $65.91 a barrel by 04:13 GMT (07:13 Kyiv time). West Texas Intermediate crude fell 38 cents, or 0.61%, to $62.17.
"WTI crude is trading downwards today due to a decrease in geopolitical risk premium caused by the peace agreement between Israel and Hamas," said OANDA Senior Analyst Kelvin Wong.
US President Donald Trump said that Israel and Hamas had reached a long-awaited ceasefire agreement in the Gaza Strip and the release of hostages as part of a plan to end the two-year war in the Palestinian enclave.
Israel and Hamas signed the first phase of our peace plan - Trump09.10.25, 02:18 • [views_3311]
Israeli Prime Minister Benjamin Netanyahu said he would convene a government meeting on Thursday to approve the ceasefire agreement.
The war in the Gaza Strip supported oil prices as investors assessed the potential risk to global oil supplies if the war escalated into a wider regional conflict.
Michael McCarthy, CEO of investment platform Moomoo Australia and New Zealand, said that a ceasefire in the Gaza Strip is unlikely to affect oil supply in the Middle East, as OPEC+ has not hit its increased production targets.
OPEC+ on Sunday agreed to a smaller-than-expected increase in production in November, easing fears of an oversupply.
McCarthy also said that a strengthening US dollar against the Japanese yen and the euro generally puts pressure on commodities. Dollar-denominated oil has become more expensive for investors holding other currencies.
On Wednesday, prices rose by about 1%, reaching a weekly high after investors viewed the stalled progress in the peace agreement with Ukraine as support for sanctions against Russia.
Meanwhile, the total weekly volume of petroleum product deliveries in the US, reflecting US oil consumption, rose last week to 21.990 million barrels per day, the highest since December 2022, according to a report by the US Energy Information Administration published on Wednesday.
JP Morgan analysts said that global oil demand began to decline in October, as numerous consumption indicators, including container arrivals at the Port of Los Angeles, truck mileage in Germany, and container throughput in China, indicate a decrease in activity.
Global oil demand averaged 105.9 million barrels per day in the first seven days of October, an increase of 300,000 barrels per day compared to last year and 90,000 barrels per day below JP Morgan's forecasts, according to a client note from the bank's analysts.
The pace of global oil and petroleum product inventory build-up also slowed, increasing by 8 million barrels last week, the slowest growth in the past five weeks, analysts noted.