The parameters of an Israel-Gaza ceasefire aren’t yet but the oil market isn’t waiting for confirmation.
WTI has fallen to $74.28 from $76.74 before the headlines. That’s wiped out the late-January gains.
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The drop in oil isn’t so much about Gaza and Israel; it’s more about the violence that has been set off as a result. Houthis in Yemen launched Red Sea ship attacks in response to the fighting in Gaza while militant groups throughout the Middle East attacked US bases as a result of the fighting.
Today a report from the White House said that it’s preparing to strike in Syria and Iraq in response to the US soldiers killed on the weekend. Notably, Iran was left out.
With that and a ceasefire, the risk of a broader war in the region and disruptions to oil supply and shipments have declined.