Oil Prices Slip as Geopolitical Risk Premium Fades After Gaza Ceasefire
Oil prices edged lower on Friday, extending losses from the previous session, as easing geopolitical tensions reduced the market’s risk premium following a ceasefire agreement between Israel and Hamas aimed at ending the Gaza war.
As of 06:36 GMT, Brent Crude futures were down 24 cents, or 0.4%, at $64.98 per barrel. West Texas Intermediate (WTI) slipped 20 cents, or 0.3%, to $61.31.
The ceasefire, signed on Thursday as part of U.S. President Donald Trump’s peace initiative, was ratified by Israel’s government on Friday. Under the deal, fighting will stop, Israel will partially withdraw from Gaza, and Hamas will free the remaining hostages in exchange for the release of hundreds of prisoners.
Despite the day’s decline, both oil benchmarks remain about 0.7% higher for the week after rebounding from last week’s steep losses. Earlier in the week, prices hit a one-week high as the stalled Ukraine peace process raised the likelihood of continued sanctions on Russia, the world’s second-largest oil exporter.
“The Gaza ceasefire deal was a major step towards ending the two-year war that has raised the risk of oil supply disruptions,” Daniel Hynes, an analyst at ANZ, said in a note.
“This (deal) saw the focus move back to the impending oil surplus, as OPEC proceeds with the unwinding of production cuts,” Hynes said.
A smaller-than-expected production increase from OPEC and its allies (OPEC+) has also helped temper oversupply concerns.
“Markets’ expectations for a sharp ramp up in crude supply have not manifested themselves in substantially lower prices,” analysts at BMI Research noted. “The most recent rise in production is lower than previously feared contributing to a slight rise in prices for the week,” they said.
In the meantime, traders are watching Washington closely. A prolonged U.S. government shutdown could slow economic activity and weigh on fuel demand in the world’s largest oil consumer.Oil prices edged lower on Friday, extending losses from the previous session, as easing geopolitical tensions reduced the market’s risk premium following a ceasefire agreement between Israel and Hamas aimed at ending the Gaza war.
As of 06:36 GMT, Brent Crude futures were down 24 cents, or 0.4%, at $64.98 per barrel. West Texas Intermediate (WTI) slipped 20 cents, or 0.3%, to $61.31.
The ceasefire, signed on Thursday as part of U.S. President Donald Trump’s peace initiative, was ratified by Israel’s government on Friday. Under the deal, fighting will stop, Israel will partially withdraw from Gaza, and Hamas will free the remaining hostages in exchange for the release of hundreds of prisoners.
Despite the day’s decline, both oil benchmarks remain about 0.7% higher for the week after rebounding from last week’s steep losses. Earlier in the week, prices hit a one-week high as the stalled Ukraine peace process raised the likelihood of continued sanctions on Russia, the world’s second-largest oil exporter.
“The Gaza ceasefire deal was a major step towards ending the two-year war that has raised the risk of oil supply disruptions,” Daniel Hynes, an analyst at ANZ, said in a note.
“This (deal) saw the focus move back to the impending oil surplus, as OPEC proceeds with the unwinding of production cuts,” Hynes said.
A smaller-than-expected production increase from OPEC and its allies (OPEC+) has also helped temper oversupply concerns.
“Markets’ expectations for a sharp ramp up in crude supply have not manifested themselves in substantially lower prices,” analysts at BMI Research noted. “The most recent rise in production is lower than previously feared contributing to a slight rise in prices for the week,” they said.
In the meantime, traders are watching Washington closely. A prolonged U.S. government shutdown could slow economic activity and weigh on fuel demand in the world’s largest oil consumer.
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