Oil prices held steady on Thursday as traders balanced news of a ceasefire agreement in Gaza — which could ease Middle East tensions — against the lack of progress in peace negotiations between Ukraine and Russia, which may keep sanctions in place and limit Russian exports.
By 06:29 GMT, Brent crude futures had inched up 2 cents to $66.27 a barrel, while U.S. West Texas Intermediate crude slipped 1 cent to $62.54.
U.S. President Donald Trump said that a long-sought ceasefire and hostage-release agreement for Gaza had been reached as part of a broader plan to end the two-year conflict in the Palestinian enclave. Israeli Prime Minister Benjamin Netanyahu announced he would convene his cabinet to approve the deal, with the signing expected at noon Israel time (0900 GMT) on Thursday.
“The devil is always in the details, and I would avoid speculating right now due to the many false starts that we have witnessed in the past,” said Claudio Galimberti, chief economist at Rystad Energy.
The war in Gaza has been a key factor underpinning oil prices, as markets assess the potential threat to global supply if the conflict spreads further in the region.
Michael McCarthy, CEO of investor platform Moomoo Australia and New Zealand, said the ceasefire is unlikely to have a major impact on Middle Eastern supply, noting that OPEC+ “has not hit its increased production targets.” The group, consisting of OPEC and its allies, agreed on Sunday to a smaller-than-expected output hike for November, easing fears of oversupply.
Prices had risen about 1% on Wednesday to their highest in a week after investors interpreted the stalled Ukraine peace talks as a sign that sanctions on Russia, the world’s second-largest oil exporter, would likely remain in place for the foreseeable future.
“As long as the war in Ukraine continues, the geopolitical risk premium is destined to remain elevated, as Russia’s oil production at risk remains high,” Galimberti said.
Meanwhile, total weekly U.S. petroleum products supplied — a key gauge of domestic consumption — climbed to 21.99 million barrels per day last week, the highest since December 2022, according to the Energy Information Administration.
Analysts at JP Morgan noted that global oil demand started October on a softer footing. Indicators including container traffic at the Port of Los Angeles, truck mileage in Germany and container throughput in China pointed to moderating activity. They estimated global oil demand at 105.9 million bpd in the first week of October, up 300,000 bpd year-on-year but 90,000 bpd below their projections.
The pace of global crude and product inventory builds has also slowed, rising by 8 million barrels last week — the smallest increase in five weeks, they added.
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