Oil prices fell on Thursday after Israel and Hamas agreed to a ceasefire deal brokered by the United States, easing geopolitical risk premiums in energy markets. Brent crude settled $1.03 lower (-1.6%) at $65.22, while WTI dropped $1.04 (-1.7%) to $61.51.
The ceasefire, which includes a mutual release of hostages and prisoners and a partial Israeli withdrawal from Gaza, marks the first phase of President Donald Trump’s peace plan to end the conflict. “Crude futures are in a corrective phase as the Israel/Hamas conflict looks to be ending,” said Dennis Kissler of BOK Financial.
Rystad Energy’s Claudio Galimberti said the peace agreement could have “wide-ranging implications” for oil markets — potentially reducing Houthi attacks in the Red Sea and increasing the likelihood of renewed nuclear negotiations with Iran.
Oil prices had gained around 1% Wednesday, supported by expectations that stalled Ukraine peace talks would keep sanctions on Russia, the world’s second-largest crude producer, in place.
Meanwhile, OPEC+’s smaller-than-expected November output hike eased near-term oversupply concerns, though weak U.S. demand and political gridlock in Washington limited bullish momentum.
A U.S. government shutdown dragged on as competing funding bills stalled in the Senate, while Trump and India’s Prime Minister Narendra Modi discussed trade amid heightened tariffs and U.S. sanctions on firms aiding Iran’s energy exports.