Oil Prices Decline Amid Prospects of Gaza Ceasefire and Dollar Strength.
Oil prices experienced a decline on Friday, influenced by the potential for a ceasefire in Gaza that could alleviate geopolitical tensions in the Middle East. Additionally, the strengthening of the U.S. dollar and a decrease in U.S. gasoline demand contributed to the downward pressure on oil prices.
As of 0203 GMT, Brent crude futures dropped by 42 cents, or 0.5%, to $85.36 per barrel, while U.S. crude futures fell by 40 cents, or 0.5%, to $80.67 per barrel. Despite these losses, both contracts are expected to end the week with marginal changes following a more than 3% increase the previous week.
Analysts noted that oil prices retreated due to reports of a potential United Nations draft resolution calling for a ceasefire in Gaza. This news, coupled with profit-taking activities, influenced market sentiment negatively.
U.S. Secretary of State Antony Blinken’s optimism regarding ceasefire talks in Qatar between Israel and Hamas also contributed to easing geopolitical concerns in the region, further impacting oil prices.
In terms of demand, gasoline product supply in the United States, the world’s largest oil consumer, fell below 9 million barrels for the first time in three weeks, signaling a potential slowdown in crude demand.
Related Posts
However, consultancy firm FGE pointed out that preliminary weekly data for the first half of March indicated a significant drop of nearly 12 million barrels in on-land crude and main product stocks at major oil hubs globally. This substantial reduction, compared to the average draw of 6 million barrels from 2015 to 2019, could provide some support to oil prices.
Meanwhile, the strengthening of the U.S. dollar following the surprise interest rate cut by the Swiss National Bank bolstered global risk sentiment but made oil more expensive for investors holding other currencies, leading to reduced demand.
