Oil Prices Decline Amid Gaza Ceasefire and Rising Supply Signals
Oil prices experienced a decline on Friday, driven by easing geopolitical tensions in the Middle East and growing indications of a potential oversupply in the global market.
A ceasefire between Israel and Hamas came into effect at 09:00 GMT, with a stipulated 72-hour window for the release of hostages, as announced by the Israeli army. this agreement, rooted in a plan initially unveiled by US President donald Trump in late September, contributed to a reduced “risk premium” in oil pricing, according to Derren Nathan, an analyst at Hargreaves Lansdown. President Trump indicated his intention to travel to the middle East on Sunday.
Adding to the downward pressure on prices, analysts at DNB highlighted “clear signs of the long-awaited glut in the oil market.” They pointed to a notable increase in oil currently being transported by sea as a key indicator of building land-based inventories in the coming months.
Data from the American Energy Data Agency (EIA) further supports this trend, revealing a 3.7 million barrel increase in US commercial oil reserves last week – substantially exceeding the Bloomberg-surveyed analyst consensus estimate of a 350,000 barrel rise.
As of 10:50 a.m. GMT (12:50 p.m. Paris time),Brent crude from the North Sea,for December delivery,traded at $64.38 per barrel, a 1.29% decrease. West Texas Intermediate (WTI), the American benchmark for November delivery, fell 1.30% to $60.71 per barrel.
Despite these market dynamics, the US government recently announced new sanctions targeting approximately fifty individuals, companies, and vessels, primarily located in Asia, accused of facilitating the sale and transport of Iranian oil and gas. DNB analysts specifically noted the Rizhao Shihua terminal, which processes over 1 million barrels of crude oil daily, including roughly 17% originating from Iran.
