Oil prices dropped on Thursday after two key developments: a ceasefire agreement between Israel and Hamas and a report showing increased crude production by the Organization of the Petroleum Exporting Countries (OPEC).
The international benchmark, Brent crude, decreased by 0.4%, trading at $81.30 per barrel at 10:32 a.m. local time (0732 GMT), down from $81.61 at the close of the previous session.
Meanwhile, the US benchmark, West Texas Intermediate (WTI), fell by 0.3%, closing at $78.90 per barrel, down from its previous session’s close of $79.14.
Qatari Prime Minister and Foreign Minister Mohammed bin Abdulrahman Al-Thani confirmed the ceasefire agreement in a press conference in Doha. The ceasefire will take effect on Sunday, marking the start of a 42-day phase. During this time, 33 Israeli detainees will be released in exchange for a number of Palestinian prisoners. This agreement comes on the 467th day of Israel’s ongoing military operation in Gaza, which has caused the deaths and injuries of over 156,000 Palestinians, mostly women and children.
The ceasefire has reduced concerns about supply disruptions in the Middle East, home to a large share of the world’s oil reserves, contributing to the drop in oil prices.
In addition, OPEC’s latest monthly oil market report revealed an increase in crude production. OPEC’s output rose by 26,000 barrels per day (bpd), or 0.1%, in December 2024, averaging 26.74 million bpd.
This increase in supply further eased concerns about market disruptions, putting additional downward pressure on oil prices.
OPEC also maintained its forecast for global oil demand growth in 2025, which further dampened price expectations. The group expects oil demand to grow by 1.45 million bpd this year, reaching 105.2 million bpd—less than previously anticipated—which also contributed to the decline in oil prices.
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