Oil Prices Edge Lower as Gaza Ceasefire Brings Calm to Markets
Oil prices slipped slightly on Thursday after Israel and Hamas reached a ceasefire agreement in Gaza, easing geopolitical tensions that had supported energy prices in recent weeks.
At 11:42 a.m. ET (15:42 GMT), Brent crude futures fell 36 cents, or 0.6%, to $65.88 per barrel, while U.S. West Texas Intermediate (WTI) dropped 30 cents, or 0.5%, to $62.25 per barrel.
Ceasefire Deal Marks First Step in Trump’s Gaza Peace Initiative
The ceasefire agreement, part of U.S. President Donald Trump’s peace initiative, includes an exchange of hostages and prisoners. Under the deal, Israel will partially withdraw from Gaza, and Hamas will release all remaining hostages captured during the conflict in exchange for hundreds of Palestinian prisoners.
Analysts say this development could reduce regional risks that have contributed to recent oil market volatility.
Analysts See a Market Correction
“Crude futures are in a corrective phase as the Israel–Hamas conflict looks to be ending,” said Dennis Kissler, Senior Vice President of Trading at BOK Financial.
Energy experts agree the peace deal is a major breakthrough for the Middle East, potentially reshaping oil market dynamics. Claudio Galimberti, Chief Economist at Rystad Energy, noted that the ceasefire could lower the risk of Red Sea attacks by Houthi rebels and even improve prospects for a future nuclear deal with Iran.
OPEC+ and Global Supply Outlook
Meanwhile, the OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries and its allies, agreed on Sunday to a smaller-than-expected output increase for November, easing concerns about potential oversupply.
Oil prices had risen around 1% on Wednesday, hitting a one-week high, after investors concluded that stalled Ukraine peace talks meant sanctions on Russia — the world’s second-largest oil exporter — would likely stay in place.
U.S. Oil Demand Hits New High
Adding to the market’s support, U.S. petroleum product demand — a key indicator of domestic oil consumption — rose to 21.99 million barrels per day last week, the highest level since December 2022, according to the Energy Information Administration (EIA).
Despite these positive consumption figures, traders remain cautious as geopolitical risks subside and attention shifts to OPEC+ supply adjustments and global economic recovery trends.
