Oil prices edged lower on Tuesday as Israel accepting a proposal to tackle disagreements blocking a ceasefire deal in Gaza eased supply concerns and China’s economic weakness weighed on the demand outlook. Brent crude was down 80 cents, or 1.03%, at $76.86 per barrel as of 0820 GMT.
Front month US West Texas Intermediate crude futures were down 87 cents, or 1.17%, to $73.50. The more actively traded second month WTI contract was last down 80 cents or 1.09% at $72.86 a barrel.
“On the one hand the thinner liquidity in the oil market at present, on the other hand some of the comments from State Secretary Blinken on a possible Gaza ceasefire deal, triggering an unwinding of some oil price spike hedge positions,” UBS analyst Giovanni Staunovo told Reuters.
US Secretary of State Antony Blinken said on Monday that Israeli Prime Minister Benjamin Netanyahu had accepted a “bridging proposal” presented by Washington to tackle disagreements blocking a ceasefire deal in Gaza, and urged Hamas to do the same.
Oil falls 2pc to end volatile week
“A ceasefire deal in Gaza now seems more likely than not, which saw market participants pricing out the risks of geopolitical tensions on oil supplies disruption,” said Yeap Jun Rong, market strategist at IG. In China, worries about economic problems weighed on oil prices after a dismal second quarter.
The world’s second-largest economy lost further momentum in July as new home prices fell at their fastest pace in nine years, industrial output slowed, export and investment growth dipped and unemployment rose.
On the supply side, production at Libya’s Sharara oilfield has risen to about 85,000 barrels per day in a move aimed at supplying the Zawia oil refinery.
Libya’s National Oil Corporation (NOC) had declared force majeure on oil exports from the field on Aug. 7 after a blockade by protesters hit production at the 300,000-bpd field.
In the US, crude stockpiles were expected to have fallen by 2.9 million barrels last week, a preliminary Reuters poll showed on Monday.
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