At 11:22 GMT, Light Crude Oil Futures are trading $62.29, down $0.26 or -0.42%.
Gaza Ceasefire Deal Tempers Geopolitical Risk Premium
Market participants are assessing news of a potential ceasefire between Israel and Hamas, which could ease regional tensions and weigh on crude’s geopolitical premium. Egyptian media reported that both parties signed a deal in Sharm el-Sheikh, although Israeli confirmation hinges on cabinet approval. If implemented, the agreement would include a partial Israeli withdrawal from Gaza and a hostage-prisoner exchange.
Rystad Energy’s chief economist Claudio Galimberti noted the deal could have “wide-ranging” implications for oil markets, including reduced Houthi disruptions in the Red Sea and an increased chance of renewed Iranian crude flows if nuclear talks resume. However, Galimberti also cautioned that past ceasefire attempts have unraveled.
Michael McCarthy of Moomoo said the OPEC+ group remains the dominant factor in Middle East supply, noting the recent agreement to modestly raise production in November had already eased oversupply concerns.
Ukraine Stalemate Supports Supply-Side Caution
Wednesday’s gains in oil were partly driven by stalled Ukraine peace negotiations, which reinforced expectations that sanctions on Russia — the world’s No. 2 oil exporter — will remain in place. This prolongs constraints on Russian crude flows into global markets.
Meanwhile, U.S. demand showed strength, with petroleum products supplied — a proxy for domestic consumption — rising to 21.99 million barrels per day last week, the highest level since December 2022, per EIA data. But global demand signs are mixed. JP Morgan analysts reported early October demand averaged 105.9 million bpd, slightly below expectations, with signs of softening in key indicators from China, Germany, and the U.S.
