Post-Gaza Ceasefire Decline in Oil Prices

Impact of the Ceasefire in Gaza on Oil Markets

The agreement reached in the initial stage of negotiations to end the war between Israel and Hamas in Gaza has increased risk appetite in global markets and consequently led to a limited decrease in oil prices. The price of Brent crude oil fell by 27 cents to $64.95, while U.S. West Texas Intermediate (WTI) crude oil decreased by 21 cents, settling at $61.29.

Weekly Value Gain

Despite this decline, both types of oil managed to maintain approximately 1% value gain on a weekly basis. ANZ analyst Daniel Hynes emphasized that this ceasefire is a critical step in the fight against supply disruption risks seen in the last two years. Hynes stated, "This development has led to a focus on the upcoming oil surplus in the markets, alongside OPEC's continued easing of production restrictions."

OPEC+'s Production Restrictions and Expectations

The limited production increase decision made by the Organization of the Petroleum Exporting Countries (OPEC) and its OPEC+ partners in November has alleviated some concerns regarding supply surplus. BMI analysts commented, "Despite the expected rapid increases in crude oil supply, there has not been a parallel decline in prices."

Cautious Investor Expectations

On the other hand, investors are acting cautiously regarding the potential negative effects of a possible government shutdown in the U.S. on the country's economy. In particular, the possibility that demand in the U.S., the world's largest oil consumer, may be negatively affected can lead to fluctuations in the markets.