Oil Stabilizes as Momentum Grows for a Ceasefire in Gaza

Oil steadied on Friday with Brent crude hovering above $85 a barrel, as the likelihood of a ceasefire in Gaza gained momentum.

Brent crude futures fell two cents to $85.76 a barrel by 1017 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose one cent to $81.08 a barrel.

Analysts said a ceasefire would help alleviate concerns about the potential escalation of the situation in Gaza on a broader scale in the region.

“This could also encourage the Houthis to halt and allow oil tankers to pass through the Red Sea, which would also be a positive development in terms of helping to achieve a balance between supply and demand dynamics,” they added.

U.S. Secretary of State Antony Blinken said on Thursday he believed talks in Qatar could lead to an agreement to halt the fighting between Israel and the Palestinian Islamic Resistance Movement (Hamas).

Blinken met with Arab foreign ministers and Egyptian President Abdel Fattah al-Sisi in Cairo, while negotiators in Qatar focused on a ceasefire lasting about six weeks.

Meanwhile, Russia launched its largest rocket and drone attack on energy infrastructure in Ukraine since the start of the war, hitting the country’s largest dam and causing power outages in several areas, Kiev said on Friday.

Ukraine has launched a series of attacks on energy infrastructure in Russia in recent weeks. Reports suggest Washington has urged Kiev to stop shelling those facilities, warning that it could provoke retaliatory responses and lead to a global rise in oil prices.

In the United States, the world’s largest oil consumer, gasoline supplies, an indicator of demand, fell to less than nine million barrels for the first time in three weeks, indicating a potential slowdown in crude oil demand.

At the same time, the dollar rose, which is inversely related to oil prices, after the surprise rate cut by the Swiss National Bank boosted risk appetite. A higher dollar makes crude oil more expensive for buyers around the world.