As a result of the agreement reached between Israel and Hamas over the first phase of a plan to resolve the war in Gaza, the price of oil suffered a fall in the early trading hours of Thursday. As a result of this development, the war risk premium associated with oil has decreased, which has prompted investors to engage in selling activities. The price of a barrel of Brent crude futures fell by 51 cents, which is equivalent to a reduction of 0.77%, and it settled at $65.74 as of 0002.

The price of West Texas Intermediate crude in the United States fell by 55 cents, which is equivalent to a fall of 0.88%, and finalized at $62. President Donald Trump of the United States made the announcement that Israel and Hamas had reached a long-awaited deal for a truce in Gaza and the release of captives. This agreement is part of a strategy to bring an end to the violence that has been going on in the Palestinian territory for the past two years. Benjamin Netanyahu, the Prime Minister of Israel, has said that he intends to call a meeting of the government on Thursday in order to approve the ceasefire accord.

At the same time that investors are evaluating the potential threat to global oil supplies in the event that the situation escalates into a more widespread regional confrontation, the continued fighting in Gaza has contributed to an increase in the price of oil. As investors read the lack of progress on a peace solution in Ukraine as a factor that would maintain sanctions against Russia, prices jumped by nearly one percent on Wednesday, reaching a high not seen in the past week.

Last week, the total weekly supply of petroleum products in the United States, which serves as a proxy for the consumption of oil in the United States, surged to 21.990 million barrels per day, marking the highest level since December 2022, according to the most recent report, which was released on Wednesday.