Oil Prices Close Lower Amid Easing Tensions in the Middle East

Israel Recovered the Bodies of Six Hostages from Gaza as Negotiations Continue to Secure the Return of Over 100 Captives Still Held in the Besieged Palestinian Enclave.

Oil prices fell to a two-week low on Tuesday as concerns over Middle East supply eased after Israel agreed to a proposal aimed at resolving the disputes blocking a ceasefire deal in Gaza, coupled with weak economic data from China weighing on fuel demand.

Brent futures for October delivery dropped 46 cents, or 0.59%, to $77.20 per barrel. U.S. West Texas Intermediate (WTI) crude for September delivery fell 33 cents, or 0.44%, to $74.04 on its last day as the front-month contract.

WTI futures for October, which are more actively traded and will soon become the benchmark, lost about 49 cents to settle at $73.17 per barrel.

U.S. Secretary of State Antony Blinken visited Egypt, pushing for a ceasefire agreement and the release of hostages in Gaza. However, significant differences still need to be resolved in this week’s talks.

Despite the ongoing ceasefire negotiations, clashes between Israel and Hamas persist, and markets remain highly sensitive to developments in the region. If market fundamentals don’t break this downward trend soon, OPEC+ might hesitate to unwind its voluntary production cuts in the near term.

OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia, has stated that global crude demand growth needs to accelerate in the coming months, or the market may struggle to absorb the planned increase in supply from the group starting in October.