Oil prices edged lower on Tuesday as Israel accepted a proposal to tackle disagreements blocking a ceasefire deal in Gaza, helping ease worries about a supply disruption in the Middle East. Brent crude fell 12 cents to $77.54, while Front month U.S. West Texas Intermediate crude futures were at $74.23 a barrel.
U.S. Secretary of State Antony Blinken said Israeli Prime Minister Benjamin Netanyahu had accepted a “bridging proposal” presented by Washington to tackle disagreements blocking a ceasefire deal in Gaza. However, with the recent resumption of suicide bombings by Hamas and Israeli military strikes in Gaza, fears of wider war persist.
Production at Libya’s Sharara oilfield has risen to about 85,000 barrels per day, easing supply concerns. In the United States, crude stockpiles were expected to have fallen last week, according to a Reuters poll.
Worries about China’s economic slowdown also pressured oil prices, while investors awaited the U.S. Federal Reserve’s plans for the next interest rate decision. Fed Chair Jerome Powell is expected to acknowledge the case for a rate cut in his upcoming speech in Jackson Hole.
Rate cuts could boost oil demand in the world’s top oil-consuming country. A looming labor dispute in Canada’s railroads is unlikely to affect oil exports significantly, thanks to excess pipeline capacity.
Overall, the geopolitical tensions in the Middle East, supply concerns in Libya, economic issues in China, and the Fed’s interest rate decision all play a role in influencing oil prices. Investors should stay informed and monitor these factors to make informed decisions about their finances and investments.
