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Oil Poised for Biggest Weekly Loss since November

Oil prices were falling by 2% on Friday morning and were headed to their biggest weekly decline since November 2023 as reports continue to emerge that negotiations of a possible ceasefire between Israel and Hamas in Gaza are advancing.

As of 10:04 a.m. ET on Friday, the U.S. benchmark, WTI Crude, was trading down by 2.30% at $72.21, while Brent Crude, the international benchmark, had declined by 1.89% on the day, to $77.28 per barrel. On Monday, Brent surged to nearly $85 a barrel following a drone attack in Jordan that killed three U.S. military servicemen.

On Friday, oil prices were headed for a drop of more than 5% this week, which would be the steepest weekly decline since November, amid reports that talks are being held for a ceasefire in the hostilities between Israel and Hamas.

Still, negotiations on a ceasefire and release of hostages are in the early stages, Bloomberg reported, citing sources with knowledge of the matter.

Fighting in Gaza continued on Friday, after the mediator Qatar had said on Thursday that Hamas had given its "initial" support to a potential deal for an exchange of hostages and prisoners during a pause in hostilities.

Majed al-Ansari, spokesperson for Qatar's Ministry of Foreign Affairs, said there were hopes of "good news" that a ceasefire could be reached "in the next couple of weeks," AFP reported today.  

The Iran-aligned Houthis continue to attack commercial vessels in the Red Sea, supporting oil prices this week. But the Fed keeping interest rates unchanged and hinting that monetary easing is still some time off, as well as concerns about China's economic growth, weighed on oil this week.

Crude oil prices retreated sharply on Wednesday "amid broader negative sentiment in the market after the Federal Reserve left rates unchanged and dashed hopes for a rate cut anytime soon," analysts at ING said.

"Crude oil suffered its biggest loss since November with the risk premium deflating amid talks for Gaza ceasefire," Saxo Bank commented on Friday morning.  

"The negotiations are still in the early stages with plenty of risks still around, including a US response to the Jordan attacks," the bank's analysts said. 

By Tom Kool for Oilprice.com

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Tom Kool

Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations More