Oil prices dipped slightly on Tuesday after Israel agreed to a U.S.-backed proposal to address the Gaza ceasefire deadlock.
This move helped ease fears of a potential supply disruption from the Middle East.
Brent crude slipped by 12 cents, or 0.15%, settling at $77.54 per barrel.
U.S. West Texas Intermediate (WTI) futures, expiring Tuesday, edged down by 14 cents, or 0.2%, to $74.23.
The more actively traded contract for the following month decreased by 15 cents to $73.52.
This follows Monday’s significant declines, with Brent falling 2.5% and WTI dropping 3%.
U.S. Secretary of State Antony Blinken stated that Israeli Prime Minister Benjamin Netanyahu accepted a “bridging proposal” to overcome the impasse and urged Hamas to reciprocate.
Yet, with ongoing violence and fresh threats of suicide bombings by Hamas, fears of a broader conflict persist.
In Libya, production at the Sharara oilfield rebounded to around 85,000 barrels per day, providing some relief to global supply chains.
This comes after a prolonged blockade that significantly hampered output from the country’s largest oilfield.
Meanwhile, U.S. crude stockpiles are anticipated to have fallen by 2.9 million barrels last week, according to a Reuters poll.
However, concerns over China’s economic slowdown, marked by plunging home prices and sluggish industrial growth, continue to weigh on demand forecasts.
Investors are also eyeing the Federal Reserve’s next move on interest rates.
With speculation mounting that the Fed might ease rates further, potentially boosting demand in the U.S., all eyes will be on Fed Chair Jerome Powell’s upcoming speech at Jackson Hole.
The prospect of rate cuts, which lower borrowing costs, could spur oil consumption in the world’s largest economy.
In Canada, a potential labor strike at the nation’s two largest railroads seems unlikely to disrupt oil exports, thanks to surplus pipeline capacity, insiders say.
As oil markets navigate the complex interplay of geopolitical tensions, economic uncertainties, and potential monetary easing, the business community remains on edge, seeking stability in a world where every headline can tilt the balance.
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