Oil prices fell for a third day on Wednesday as hopes for a ceasefire agreement in the Middle East rose and crude stocks and production rose in the United States, the world’s largest oil consumer.
July Brent crude futures were down 70 cents, or 0.8%, at $85.63 a barrel by 04:56 GMT. WTI crude oil fell 75 cents, or 0.9%, to $81.18 a barrel in June.
Expectations that a ceasefire agreement between Israel and Hamas might be on the horizon contributed to the decline in oil prices. The potential for a ceasefire agreement between Israel and Hamas has eased concerns about an escalation of the conflict and any potential disruption in supplies.
But Netanyahu said on Tuesday that he will press ahead with the attack on the southern Gaza city of Rafah, regardless of Hamas’ response to recent proposals to halt fighting and return Israeli hostages.
In addition, the swelling of US crude oil stocks and the increase in crude supply also put prices under pressure.
U.S. production rose to 13.15 million barrels per day (bpd) in February from 12.58 million barrels per day (bpd) in January, the Energy Information Administration said Tuesday, marking the biggest monthly increase in nearly 3.5 years.
Signs of ongoing inflation ahead of the US driving season, when gasoline demand is rising strongly, are also raising concerns about crude oil demand.
To prevent oil from falling further, OPEC production fell by 100,000 barrels per day in April to 26.49 million barrels per day, according to a study.
The survey reflects declining exports from Iran, Iraq, and Nigeria amid ongoing voluntary supply cuts by some members of the broader OPEC+ alliance.
