By Adedapo Adesanya
Crude oil prices eased on Thursday on reports the US and Israel will try to restart talks on a possible ceasefire in Gaza, as Brent futures declined by 58 cents or 0.8 per cent to trade at $74.38 a barrel and the US West Texas Intermediate (WTI) futures also lost 58 cents or 0.8 per cent to end at $70.19 per barrel.
The oil market has been gripped by concerns about the ongoing conflict in the Middle East and the possibility that it could disrupt oil supply.
Negotiators will gather in Doha, the capital of Qatar, in the coming days to try to restart talks toward a deal for a ceasefire and the release of hostages in Gaza.
Iran fired close to 200 missiles at Israel on October 1 and this led the international crude benchmark, Brent crude to surge about 8 per cent during the week ended October 4 on worries Israel would attack Iran’s oil infrastructure.
It fell about 8 per cent in the week ended October 18 on reports Israel would not hit energy infrastructure, easing fears of supply disruptions.
Iran, a member of the Organisation of the Petroleum Exporting Countries (OPEC), produces about 4 million barrels per day and backs several groups fighting Israel, including Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen. A retaliatory attack by Israel will send prices up.
Analysts believe that other Middle Eastern producers Saudi Arabia and the United Arab Emirates (UAE), have enough spare capacity to offset potential losses of supply from Iran.
However, in case the conflict escalates to Iranian proxies targeting oil infrastructure in Iran’s Middle Eastern neighbours, or if Iran moves to block or restrict oil cargo traffic in the Strait of Hormuz, oil prices could spike to triple digits and record highs.
In a related development, Saudi Arabia’s oil export revenues fell to the lowest level in more than three years in August caused by underwhelming oil demand and continued supply constraints from the world’s top crude exporter.
Traders also weighed uncertainty ahead of the US presidential election on November 5 between former president Donald Trump and current Vice President Kamala Harris.
Current data from many sources currently point to a Trump win, market analysts noted.
Pressure also came as data in Europe, the US, and the UK show that demand worries remain and this could further depress oil prices.