- Web Desk
- 44 Minutes ago
Oil prices slip as Israel-Hamas truce plan calms war jitters
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- Web Desk
- 2 Hours ago
SINGAPORE: Oil prices retreated in early trading on Thursday after Israel and Hamas reportedly reached the first phase of a plan to end the war in Gaza, cooling market fears of a wider regional conflict and prompting investors to unwind the war-risk premium that had supported crude in recent weeks.
By 0002 GMT, Brent crude futures were down 51 cents, or 0.77 percent, to $65.74 a barrel, while US West Texas Intermediate (WTI) crude slipped 55 cents, or 0.88 percent, to $62.
Ceasefire plan shifts market sentiment
US President Donald Trump announced that Israel and Hamas had agreed on a ceasefire and hostage release deal aimed at ending the two-year-old war in Gaza. Following the announcement, Israeli Prime Minister Benjamin Netanyahu said he would convene his government on Thursday to approve the agreement.
The conflict in Gaza had been a key factor keeping oil prices elevated, as traders worried that it could spread across the Middle East and disrupt global energy supplies. The news of progress towards peace immediately weighed on prices, as investors reassessed the likelihood of regional instability affecting oil flows.
Gains fade after short rally
Just a day earlier, oil prices had climbed around 1 percent to a one-week high, supported by expectations that stalled Ukraine peace talks would keep Western sanctions on Russian crude intact. On Wednesday, Brent settled at $66.25 a barrel and WTI at $62.55, their highest levels since late September.
Russia, the world’s second-largest oil producer after the US, has been gradually increasing its crude output despite Western sanctions. Deputy Prime Minister Alexander Novak said on Wednesday that Moscow was close to meeting its OPEC+ production quota. However, the country’s energy infrastructure has been under pressure due to continued Ukrainian drone attacks on oil refineries.
Strong US demand offers some cushion
Data from the US Energy Information Administration (EIA) showed total weekly petroleum products supplied, a key indicator of demand, rose last week to 21.99 million barrels per day, the highest since December 2022. The surge in consumption offered some support to prices amid otherwise bearish sentiment.
Traders are also keeping an eye on the US Federal Reserve, which is expected to continue cutting interest rates in its upcoming meeting later this month. Lower borrowing costs typically support economic activity and boost demand for energy.
Still, with geopolitical tensions easing in the Middle East and optimism over supply stability rising, oil prices may face more downward pressure in the coming sessions as markets adjust to a potentially calmer global landscape.