Oil prices traded within a narrow range on Thursday as investors weighed the potential impact of a Gaza ceasefire against stalled peace efforts in Ukraine that could keep sanctions on Russia in place and limit global supply.
Brent crude oil, against which Nigerian crude oil is priced, slipped 12 cents to $66.13 a barrel at 10:43 a.m. in Nigeria, while U.S. West Texas Intermediate crude declined 14 cents to $62.41 a barrel.
The muted movement reflected cautious trading as the market assessed two opposing geopolitical forces influencing the global energy balance.
Egypt’s state-affiliated Qahera TV reported that Israel and Hamas had formally agreed to a ceasefire that took effect after noon in the region, following negotiations held in the Egyptian resort city of Sharm el-Sheikh.
Israeli Prime Minister Benjamin Netanyahu’s office, however, noted that the truce would only take effect after ratification by the Israeli cabinet later in the day.
Under the reported deal, hostilities would end, Israel would partially withdraw from Gaza, and Hamas would release hostages in exchange for Palestinian prisoners held by Israel. T
he agreement represents the first major breakthrough since the war began, raising hopes of stability in one of the world’s most geopolitically sensitive regions.
Analysts say the ceasefire could have far-reaching implications for the energy market.
Rystad Energy’s chief economist, Claudio Galimberti, described the development as a significant moment in Middle Eastern history, noting that it could potentially reduce attacks by Yemen’s Houthis on Red Sea shipping routes and revive prospects for renewed negotiations on Iran’s nuclear program, which could ultimately increase Iranian crude exports.
Galimberti cautioned, however, that similar agreements had previously collapsed before implementation, leaving the market uncertain about the long-term impact.
The conflict in Gaza has supported crude prices in recent months as traders priced in the risk of a broader regional escalation that could threaten energy supplies from key oil producers in the Middle East.
The latest ceasefire, if sustained, could ease that risk premium, though market reaction remained subdued given doubts about durability.
Michael McCarthy, chief executive of investor platform Moomoo Australia and New Zealand, said the truce was unlikely to cause any immediate change in oil supply from the region, noting that the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have not fully met their increased production targets.
The producer alliance agreed earlier in the week to a November output hike that was smaller than expected, a move that reassured traders that the market would not face near-term oversupply.
Prices had gained around one percent on Wednesday, hitting a one-week high after traders interpreted the lack of progress in Ukraine peace talks as a sign that sanctions on Russia, the world’s second-largest oil exporter, would remain in place for an extended period.
The continuation of those sanctions keeps Russian exports constrained, helping offset bearish signals from potential Middle Eastern de-escalation.
Meanwhile, energy data released by the U.S. Energy Information Administration on Wednesday showed that total weekly petroleum products supplied — a key proxy for U.S. oil consumption — rose to 21.99 million barrels per day, the highest level since December 2022.
The data pointed to resilient demand from the world’s largest oil consumer, lending some support to prices.
JP Morgan analysts, however, noted that global oil demand began the month of October on a softer note. Indicators such as container arrivals at the Port of Los Angeles, truck toll mileage in Germany, and container throughput in China suggested a moderation in industrial and transport activity.
According to the bank, global demand averaged 105.9 million barrels per day in the first week of October, up 300,000 barrels per day from a year earlier but still 90,000 barrels per day below its initial forecast.
The competing narratives of geopolitical relief in the Middle East and ongoing conflict in Eastern Europe kept oil traders cautious, with most investors opting to maintain neutral positions ahead of further clarity on the Gaza truce’s implementation and potential OPEC+ supply adjustments.
Analysts say prices are likely to remain range-bound in the short term, with downside limited by continued Russian export constraints and upside capped by uncertain global demand growth.
