Oil prices saw significant fluctuations on Thursday, with U.S. crude futures settling 2.5% lower at $73.98 a barrel, while the Brent contract fell 2% to $78.91 a barrel. This wild trading activity was driven by conflicting reports surrounding the progress of an extended ceasefire between Israel and Hamas, potentially easing geopolitical tensions and concerns about supply disruptions.
Amid the uncertainty surrounding the Gaza ceasefire, tensions in the Middle East remained elevated. Reports suggested that Hamas received a proposal for an extended pause in fighting in exchange for releasing remaining hostages. However, Hamas tempered expectations of an imminent agreement, indicating that negotiations were ongoing.
Meanwhile, beyond the Gaza conflict, tensions in the region persisted following a U.S. vow to defend its troops after a deadly drone attack in Jordan.
In the realm of central banking, major institutions hinted at a shift towards rate cuts. While the Federal Reserve kept interest rates unchanged, Chair Jerome Powell indicated that rates had peaked and could move lower in the coming months if inflation continued to fall. Data showing a steady easing in the labor market further supported this narrative.
Similarly, the Bank of England maintained its interest rates but softened its stance on potential rate cuts. In the eurozone, inflation eased slightly, aligning with the European Central Bank’s target.
However, the OPEC+ meeting yielded no changes to production policy, disappointing some who hoped for further cuts to support oil prices. The cartel’s limited room to maneuver in terms of production adjustments contributed to market uncertainty.
Overall, oil markets navigated a complex landscape influenced by geopolitical tensions, central bank policies, and production dynamics, resulting in notable price volatility.