By Adedapo Adesanya
Oil prices were suppressed on Friday as the possibility of a ceasefire in Gaza weakened crude benchmarks, with Brent futures down by 35 cents to $85.43 per barrel and the US crude futures down by 44 cents to $80.63 a barrel.
For the week, both benchmarks logged less than a 1 per cent change on the week.
Meanwhile, the war in Europe and the shrinking US rig count cushioned the fall.
Market analysts noted that successful peace talks in Gaza would prompt Yemen’s Houthi rebels to allow oil tankers to pass through the Red Sea, providing succour for the market even as there was no major disruption to supply.
The US Secretary of State, Mr Antony Blinken, said during the week that he believed talks in Qatar could reach a Gaza ceasefire agreement between Israel and Hamas.
The US official met Arab foreign ministers and Egypt’s President Abdel Fattah El-Sisi in Cairo as negotiators in Qatar centred on a truce of about six weeks.
While a possible ceasefire meant crude might move more freely globally, a lower US oil rig count and the potential for easing US interest rates helped support prices
Meanwhile, the US Dollar was set for a second week of broad gains after the Swiss National Bank’s surprise interest rate cut on Thursday bolstered global risk sentiment.
A stronger greenback makes oil more expensive for investors holding other currencies, dampening demand.
According to Baker Hughes data, the US oil rig count fell by one to 509 this week, indicating lower future supply.
The conflict in Eastern Europe also kept oil prices from moving lower. Russia launched the largest missile and drone attack on Ukrainian energy infrastructure of the war to date on Friday, hitting the country’s largest dam and causing blackouts in several regions.
Ukraine has now moved from attacking refineries to attacking other infrastructure that is crucial to Russia in a prolonged war that started two years ago saying it is retaliation to what it faced.
The US urged Ukraine to halt its drone attacks on Russian oil refineries due to its assessment that the strikes could led to Russian retaliation and push up global oil prices.
However, the new development could mean that Russia would further discount its barrels in light of the escalation.
