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Middle East risk premium fading as oil falls on Gaza plan

Early Thursday, oil prices dropped after Israel and Hamas reached an agreement on the first phase of the plan to end the Gaza war. This weighed on the war risk premium for oil and pushed investors to sell.

Brent crude futures fell 51 cents or 0.77% to $65.74 per barrel at 0002 GMT. U.S. West Texas Intermediate Crude fell 55 cents or 0.88% to $62.

U.S. president Donald Trump announced that Israel and Hamas reached a long sought-after deal on a Gaza ceasefire, including the release of hostages. The plan was to end the war that has raged in the Palestinian enclave for two years.

Benjamin Netanyahu, the Israeli prime minister, said that he will convene the Israeli government on Thursday in order to approve the ceasefire accord.

Investors have been weighing the risk of a regional war escalating into a global conflict that could affect oil supplies.

Investors viewed the stalled progress in a Ukraine peace agreement as maintaining sanctions against Russia.

The Energy Information Administration reported on Wednesday that the total weekly U.S. supply of petroleum products, which is a proxy for U.S. consumption of oil, increased last week to 21,990 million barrels a day, the highest since December 2022. (Reporting and editing by Christopher Cushing in Houston, Georgina McCartney from Houston)

(source: Reuters)