Oil Prices Fall as Hamas Hostage Release Eases Pressure

October 21, 2023
oil prices fall

By Adedapo Adesanya

Oil prices settled lower on Friday after the Islamist group, Hamas, released two US hostages from Gaza, a move that calmed the market from expecting a further escalation.

Brent crude futures fell by 22 cents or 0.2 per cent to settle at $92.16 a barrel and the US West Texas Intermediate (WTI) crude dropped 62 cents or 0.7 per cent to close at $88.75 a barrel.

Hamas’ armed wing released two US hostages from Gaza, a mother and her daughter, leading to hopes the Israeli-Palestinian crisis could de-escalate without engulfing the rest of the Middle East region and disrupting oil supplies.

The spokesperson for the group said it was done for humanitarian reasons in response to Qatar’s mediation efforts in the war with Israel.

According to analysts, the report took some of the risk premium out of the market as it went from starting the day with little hope to possible signs that there may be some way out of this crisis.

The Middle East, in the last week, has become the core focus of the oil market because of fears of a region-wide conflict that would likely involve a disruption of oil supplies.

However, at the moment, it is evident that supply disruptions may be less likely now.

The US is also lifting sanctions on Venezuela’s oil industry in exchange for the Maduro regime agreeing to hold elections next year.

The US Department of the Treasury issued general licenses authorizing transactions involving the oil and gas sector and removed the ban on secondary trading.

Meanwhile, the US also said it planned on buying another 6 million barrels of crude oil for the Strategic Petroleum Reserves—but at a price point significantly lower than current market prices.

Crude oil prices also received a boost this week from US crude and product inventory draws.

Also supporting prices were forecasts of a tightening market in the fourth quarter after top producers Saudi Arabia and Russia extended supply cuts to year-end.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

Leave a Reply

benin bypass
Previous Story

Benin Bypass and Nigeria’s Economy

more wealth for investors Naira
Next Story

Naira Depreciates to N808/$1 at Official Market

Latest from Economy

Don't Miss