"Oil prices declined on Friday, after settling around 1.6% lower in the previous session, as the market's risk premium faded after Israel and Hamas agreed to the first phase of a plan to end the war in Gaza. "Finally having some kind of peace process in the Middle East is lowering the shoulders a little bit," said Bjarne Schieldrop, chief commodities analyst at SEB. This could ease fears about crude carriers passing through the Suez Canal and the Red Sea, he said."
"Under the deal, which Israel's government ratified on Friday, fighting will cease, Israel will partially withdraw from Gaza, and Hamas will free all remaining hostages it captured in the attack that precipitated the war, in exchange for hundreds of prisoners held by Israel. Numerous vessels have been attacked by the Iran-aligned Houthis in Yemen since 2023, targeting ships they deem linked to Israel in what they described as solidarity with Palestinians over the war in Gaza."
Oil prices declined as the market's risk premium eased after Israel and Hamas agreed to a first-phase ceasefire. Brent fell to $64.56 a barrel and U.S. WTI to $60.90, each down about 1% on Friday. The ceasefire includes a partial Israeli withdrawal from Gaza and the release of remaining hostages by Hamas in exchange for hundreds of prisoners held by Israel. Reduced threats to shipping through the Suez Canal and Red Sea alleviated some supply disruption concerns after Houthi attacks on vessels since 2023. Attention returned to an impending oil surplus as OPEC+ unwinds production cuts and agreed a smaller-than-expected November output hike.
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