Oil falls on Gaza plan, fading Middle East risk premium

Oil prices fell in early trade on Thursday after Israel and Hamas agreed to the first phase of a plan to end the war in Gaza, weighing on oil’s war risk premium and pushing investors to sell.

Brent crude futures were down 51 cents, or 0.77%, at USD 65.74 a barrel by 0002 GMT. US West Texas Intermediate crude fell 55 cents, or 0.88%, to USD 62.

US President Donald Trump said that Israel and Hamas had reached a long-sought deal for a Gaza ceasefire and hostage release under a plan for ending the two-year-old war in the Palestinian enclave.

Israeli Prime Minister Benjamin Netanyahu said he would convene the government on Thursday to approve the ceasefire agreement.

The war in Gaza has supported oil prices as investors have weighed the potential risk to global oil supply if the war were to develop into a wider regional conflict.

Prices had gained around 1% on Wednesday to reach a one-week high after investors viewed stalled progress on a Ukraine peace deal as sustaining sanctions against Russia.

Meanwhile, total weekly US petroleum products supplied, a proxy for US oil consumption, rose last week to 21.990 million barrels per day, the most since December 2022, showed a report from the Energy Information Administration on Wednesday.

(Reporting by Georgina McCartney in Houston; Editing by Christopher Cushing)