Global oil markets witnessed a 2% decline on Thursday, fueled by uncertain reports of a potential ceasefire between Israel and Hamas and a notable U.S. refinery facing disruption due to a power outage.
Despite skepticism from Qatari officials about the ceasefire’s existence, Hamas reportedly responded positively to an earlier proposal.
Brent crude futures dropped by $1.85 (2.5%) to settle at $78.70 per barrel, with U.S. West Texas Intermediate crude futures falling by $2.03 (2.7%) to $73.82. The Middle East’s ongoing tensions, fueled by Houthi attacks in the Red Sea, have previously driven oil prices up.
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Houthi forces, based in Yemen, confirmed their intent to persist in targeting U.S. and British warships, labeling these actions as self-defense.
OPEC+, responding to market dynamics, implemented voluntary production cuts of 2.2 million barrels per day in November to support oil prices.
Recent market reactions were also influenced by Federal Reserve Chair Jerome Powell’s announcement on interest rates. Powell suggested a peak had been reached, projecting a decline in interest rates and signaling a positive outlook for sustained economic growth.
Lower interest rates and anticipated economic growth typically drive increased oil demand.