Oil Prices Fall 2% to Six-Week Low on Ceasefire Talks, Demand Concerns.
Brent futures decreased by $1.39, or 1.7%, settling at $81.01 per barrel, while U.S. West Texas Intermediate crude (WTI) closed $1.44, or 1.8%, lower at $76.96 per barrel. These figures mark the lowest closes for Brent and WTI since June 7, pushing both benchmarks into technically oversold territory for the first time since early June.
Additionally, U.S. diesel futures settled at their lowest since June 7, and gasoline futures closed at their lowest since June 14.
Efforts to secure a ceasefire between Israel and the militant group Hamas, based on a plan proposed by U.S. President Joe Biden in May and mediated by Egypt and Qatar, have gained traction over the past month. Israeli Prime Minister Benjamin Netanyahu informed families of hostages held in Gaza that a deal for their release could be near, despite ongoing fighting in the Palestinian enclave.
The conflict in Gaza has supported oil futures as investors considered the risk of potential disruptions to global crude supply in key Middle Eastern producing regions. United Nations Special Envoy to Yemen Hans Grundberg warned of a serious risk of regional escalation following new Iran-backed Houthi attacks on commercial shipping and Israel’s first airstrikes on Yemen in retaliation for Houthi drone and missile attacks.
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Meanwhile, Palestinian factions, including rivals Hamas and Fatah, have agreed to end their divisions and form an interim national unity government during negotiations in China.
“Ceasefire negotiations in the Middle East and an uncertain macroeconomic outlook in China are exerting downward pressure on oil prices this week,” Claudio Galimberti, global market analysis director at Rystad, said in a note.
