Oil settles at one-month low on Gaza ceasefire hopes

DOHA: Oil prices settled over $2 lower on Friday at their lowest level since mid June as investors eyed a possible ceasefire in Gaza, while a strength...

DOHA: Oil prices settled over $2 lower on Friday at their lowest level since mid-June as investors eyed a possible ceasefire in Gaza, while a strengthened dollar drove values down further. Brent crude prices settled down $2.48, or 2.9%, to $82.63 a barrel. US West Texas Intermediate crude futures dropped $2.69, or 3.3%, to $80.13. 

For the week, Brent fell 2.8%, while WTI futures fell 2.5%. US Secretary of State Antony Blinken said a long-sought ceasefire between Israel and Hamas was within sight. The war in Gaza has led investors to price in a risk premium when trading oil, as tensions threaten global supplies. If a ceasefire is reached, the Houthis could ease their attacks on commercial vessels in the Red Sea, since the group declared the attacks in support of Hamas. 

The United Nations’ highest court said Israel’s occupation of Palestinian territories and its settlements there are illegal and should be withdrawn as soon as possible, further buoying hopes of an end to the conflict. Meanwhile, the US dollar index climbed after stronger-than-expected data on the US labour market and manufacturing last week, pressuring oil prices. 

Asian spot liquefied natural gas (LNG) prices held steady last week on the back of support from an outage at US Freeport LNG which saw some cargo cancellations, and as summer weather boosted demand. The average LNG price for September delivery into north-east Asia was at $12.20 per million British thermal units (mmBtu), industry sources estimated. 

Freeport LNG in Texas, south of Houston, halted operations on July 7 before Hurricane Beryl made landfall, causing power outages and infrastructure damage to ports and energy companies. Freeport said on Monday it planned to restart one processing train this week and the remaining two trains shortly after, but production would be reduced while it continued repairs.