Crude Sinks On Possible Gaza Ceasefire

Crude traded higher through the European session but fell sharply during the NY afternoon on news that progress may have been made on a ceasefire agreement between Israel and Hamas. There were conflicting reports though. The USD index fell 0.2%.

• Brent is down 2.1% to $78.85/bbl. It fell sharply from around $81.40 to $78.57 on the ceasefire news. The break below the 50-day EMA support of $79.45 has opened up $76.13, January 17 low.
• WTI is 2.5% lower at $73.92/bbl, close to the intraday low of $73.70. It was trading around $76.75 before it sank to $74.09. The breach of support at $74.80 has opened up $70.62. It is now trading below the 200-day moving average and approaching the 50-day.
• Al Jazeera originally reported that Israel had accepted a ceasefire proposal but the post was changed to Hamas has received a proposal “in a positive atmosphere”. Bloomberg is saying that talks are in early stages and they are being pushed by the US, Qatar and Egypt, who is suffering from the sharp drop in shipping through the Suez Canal.
• JP Morgan estimated that the “pure geopolitical risk premium” in crude prices is only $2.
• The shutdown of BP’s US Whiting refinery due to a loss of power also weighed on oil prices on Thursday. It is a major refiner of Canadian crude.
• The OPEC+ meeting didn’t result in any changes but quotas for Q2 will be decided in early March.