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Oil prices suffer losses as US crude falls below $60
Oil prices suffered sharp losses at settlement, as the risk premium following the Gaza agreement faded on Friday, October 10. Black gold fell more than 3% after Israel and Hamas agreed to the first phase of a plan to end the war in Gaza.
This decline also comes just one day after US President Donald Trump said gasoline prices would fall to $2 per gallon.
Brent crude futures fell $2.53, or 3.88%, to settle at $62.69 a barrel.
West Texas Intermediate crude fell $2.61, or 4.24%, to settle at $58.90.
Trade relations between China and the US were thought to be slowly improving, but this latest setback has once again raised concerns that higher tariffs could slow the global economy and hurt oil demand.
"Finally, some sort of peace process in the Middle East is easing tensions," said Bjarne Schieldrop, senior commodities analyst at SEB. He added that this could ease concerns about crude oil tankers passing through the Suez Canal and the Red Sea.
Israel and Hamas signed a ceasefire agreement on Thursday, as part of the first phase of an initiative proposed by US President Donald Trump to end the war in Gaza.
Under the agreement, approved by the Israeli government on Friday, fighting will cease, Israeli forces will partially withdraw from the Strip, and Hamas will release all remaining hostages in exchange for hundreds of Palestinian prisoners held by Israel.
Prices had reached their highest levels in a week after gaining about 1% on Wednesday, as progress on the Ukraine peace agreement stalled, meaning sanctions on Russia, the world's second-largest oil exporter, would remain in place.
On a weekly basis, both crude prices rose about 0.7% after last week's sharp decline.
Daniel Hynes, an analyst at ANZ Bank, said in a note on Friday that the Gaza ceasefire agreement represents "a major step toward ending the two-year-old war, which has increased the likelihood of oil supply disruptions."
He added that "the agreement has refocused attention on the looming oil surplus, as OPEC moves forward with plans to unwind production cuts."
Investors also fear that a prolonged US government shutdown could weaken the US economy and reduce demand for oil.
