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WTI dips below $79 on Gaza ceasefire prospects

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West Texas Intermediate, the US crude oil benchmark, is trading around $78.35 on Thursday. The WTI price edged lower as improved prospects for a ceasefire between Hamas and Israel could ease geopolitical tensions in the Middle East, which weigh on the crude oil’s price.

Israel and Hamas have tentatively agreed to a deal to halt fighting in Gaza and exchange Israeli hostages for Palestinian prisoners.

An ending of conflict between Israel and Hamas will ease tensions in the Middle East and reduce the threats of disruption to crude supplies in the region. This, in turn, could undermine the black gold price.

However, US crude oil stockpiles extended their decline, which might cap the downside for the WTI price. The US Energy Information Administration weekly report showed crude oil stockpiles for the week ending January 10 decreased by 1.962 mln barrels, compared to a decline of 959,000 barrels in the previous week. The market consensus estimated that stocks would fall by 1.6 mln barrels.

Oil traders await the release of US Retail Sales for December and weekly Initial Jobless Claims for fresh impetus, due later on Thursday. In case of a weaker-than-expected outcome, this could drag the greenback lower and lift the USD-denominated commodity price.

(Source: OANDA)