Oil prices declined by around 2% on Tuesday, hitting a six-week low due to potential ceasefire developments in Gaza and growing concerns over Chinese demand. Brent crude dropped $1.39, or 1.7%, to $81.01 per barrel, while U.S. West Texas Intermediate (WTI) fell $1.44, or 1.8%, to $76.96 per barrel. These are the lowest settlement prices for both benchmarks since June 7, pushing them into technically oversold territory. U.S. diesel and gasoline futures also hit their lowest prices since June.
Efforts to negotiate a ceasefire between Israel and Hamas have gained traction, fueled by a plan from U.S. President Joe Biden. Israeli Prime Minister Benjamin Netanyahu suggested a potential deal to free hostages in Gaza. Biden is set to meet Netanyahu at the White House on Thursday. The ongoing conflict in Gaza has previously supported oil prices due to concerns over potential disruptions to global crude supply from the Middle East.
Meanwhile, U.N. Envoy Hans Grundberg warned of escalating tensions in the region, citing recent Iran-backed Houthi attacks and Israeli air strikes in Yemen. In addition, Palestinian factions Hamas and Fatah agreed to form a national unity government during talks in China.
Rising expectations for interest rate cuts in September, particularly from the European Central Bank and the U.S. Federal Reserve, could stabilize oil prices. However, a stronger U.S. dollar, which makes oil pricier for other countries, added downward pressure.
China’s recent interest rate cuts aimed at boosting its economy also influenced market sentiment. Weekly U.S. oil storage data from the API and EIA is expected, with analysts forecasting a 1.6 million-barrel decrease in crude stocks, which would mark the first four-week decline since September 2023.
(Reporting by Scott DiSavino, Robert Harvey, Georgina McCartney, and Jeslyn Lerh; Additional reporting by Laila Kearney; Editing by Rod Nickel, Marguerita Choy, and Chris Reese)
Original Story https://www.livemint.com/news/oil-prices-fall-2-to-six-week-low-on-ceasefire-talks-demand-concerns-11721763245769.html
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