Oil prices are falling: the impact of the dollar and the situation in the US
9 October 09:38
Oil prices fell on Thursday after Israel and Hamas agreed on the first phase of a plan to end the war in the Gaza Strip. This agreement has reduced geopolitical tensions in the Middle East, and the strengthening of the US dollar is putting additional pressure on the commodity market. This was reported by "Komersant Ukrainian" with reference to Reuters.
According to the agency, futures for Brent crude oil fell by 34 cents, or 0.51%, to $65.91 per barrel, while US WTI fell by 38 cents, or 0.61%, to $62.17.
“WTI is trading on the weaker side today due to a decrease in the geopolitical risk premium caused by the peace agreement between Israel and Hamas,” said OANDA analyst Calvin Wong.
The truce and the world’s reaction
US President Donald Trump announced that the parties had reached a long-awaited ceasefire agreement in Gaza, which also includes the release of hostages.
Israeli Prime Minister Benjamin Netanyahu said that the government would meet on Thursday to formally approve the agreement.
The war in Gaza has supported oil prices over the past two years, as investors feared the conflict would expand to a scale that could threaten global energy supplies.
The impact of the dollar and the situation in the United States
In addition to the political factor, oil quotations were affected by the strengthening of the US dollar against the yen and the euro. This makes dollar-denominated oil more expensive for investors from other countries.
The day before, oil prices were rising by about 1% due to the lack of progress in the peace talks on Ukraine, which kept sanctions against Russia in place.
Meanwhile, US consumption of petroleum products last week rose to 21.99 million barrels per day, the highest since December 2022, according to the US Energy Information Administration (EIA).
Market analytics
JP Morgan experts note that global oil demand began to slow in October. The decline in activity is observed in a number of indicators, from the number of containers in the port of Los Angeles to freight traffic in Germany and China.
According to their estimates, global demand in the first week of October amounted to 105.9 million barrels per day, which is only 300 thousand barrels more than last year and 90 thousand less than forecast.
At the same time, the rate of accumulation of world oil reserves also slowed down – last week they grew by only 8 million barrels, which is the lowest figure in the last five weeks.
