The new TotalEnergies logo at its unveiling ceremony, at a charging station in La Défense, in the suburbs of Paris. (Credit: Christophe Archambault/AFP)
LONDON — The price of U.S. crude oil to its lowest level in six months following the implementation of the cease-fire between Israel and Hamas in Gaza on Friday. The price per barrel dropped below the $60 mark amid a market weighed down by oversupply.
As of 2:40 p.m. GMT (4:40 p.m. in Paris), the price of West Texas Intermediate (WTI) for November delivery fell 2.15 percent to $60.19 a barrel, after slipping to $59.57, its lowest point since April. Brent crude from the North Sea for December delivery was down 1.96 percent at $60.19 a barrel.
The Israeli army announced the start of the Gaza Strip cease-fire at 9 a.m. GMT Friday, which is set to be followed within 72 hours by the release of hostages, in line with an agreement reached with Hamas.
Oil prices are falling because the deal "reduces the geopolitical risk premium" and eases "concerns over supply disruptions," Lukman Otunuga, an analyst at FXTM, told AFP.
The drop in crude prices is also attributed to "clear signs of the long-expected oil market glut," indicated by "the sharp rise in oil in transit at sea," which is "generally a leading indicator of changes in onshore stocks in the coming months," according to analysts at DNB Carnegie.
In recent months, eight members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) have already raised their production quotas by more than 2.5 million barrels per day. This situation contrasts sharply with a "largely unchanged" demand for crude oil, according to the International Energy Agency.
Concerns over a destabilized market overshadow the war in Ukraine and a new round of sanctions announced Thursday by the U.S. government targeting about 50 people, companies and ships, mainly based in Asia and accused of participating in the sale and transport of Iranian oil and gas.
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