Oil prices fell on Friday on the possibility of an imminent ceasefire in Gaza, which could alleviate geopolitical concerns in the Middle East, and the strengthening dollar and declining US gasoline demand.
Brent crude futures were down 53 cents, or 0.6%, at $85.25 a barrel by 06:51 GMT. WTI futures fell 52 cents, or 0.6%, to $80.55 a barrel.
Both contracts are headed for a flat or slightly lower end to the week after rising more than 3% last week.
Oil traded lower on reports of a draft UN resolution calling for a ceasefire in Gaza, and the start of a new round of profit-taking.
A ceasefire will help calm fears that the situation in Gaza could spread to the region. It could also encourage the Houthis to back down and allow oil tankers to pass through the Red Sea, which would be a positive development in helping balance supply and demand dynamics.
While negotiators in Qatar have been focusing on a ceasefire for about six weeks, Arab foreign ministers and Egyptian President Abdel Fattah El-Sisi met in Cairo.
Blinken said on Thursday that he believes a ceasefire agreement in Gaza between Israel and Hamas can be reached as a result of talks.
The gasoline product supplied by the USA, the world’s largest oil consumer, declined as an indicator of demand, indicating a possible slowdown in crude oil demand.
However, preliminary weekly data for the first half of March shows that onshore crude and primary product stocks in major oil hubs globally fell by almost 12 million barrels, compared to an average decline of 6 million barrels between 2015 and 2019.
On the other hand, the US dollar, which is traded inversely with oil prices, strengthened after the Swiss National Bank’s surprise interest rate cut supported the global risk perception.
A strengthening dollar makes oil more expensive for investors holding other currencies, reducing demand.
