By Stephanie Kelly
LONDON (Reuters) -Oil prices were little changed on Thursday as investors weighed a ceasefire deal in Gaza that could ease geopolitical tensions in the Middle East against stalled peace talks in Ukraine that could sustain sanctions on Russia and curb its exports.
Brent crude futures were up 13 cents to $66.38 a barrel at 0821 GMT. U.S. West Texas Intermediate crude was up 11 cents to $62.66.
U.S. President Donald Trump said that Israel and Hamas had reached a long-sought deal for a Gaza ceasefire and the release of hostages under a plan for ending the two-year-old war in the Palestinian enclave.
Israeli Prime Minister Benjamin Netanyahu said he would convene his government to approve the ceasefire agreement. The signing of the deal is expected to take place at noon Israel time (0900 GMT) on Thursday.
“The peace agreement is a major breakthrough in recent Middle Eastern history – its implications for oil markets could be wide-ranging, from the possibility of a decrease in the Houthis’ attacks in the Red Sea to an increase in the likelihood of a nuclear deal with Iran and, eventually, the possibility for Iran to increase its crude and product exports,” Rystad Energy’s chief economist Claudio Galimberti said in a note.
Still, Galimberti cautioned that attempts at a ceasefire deal have fallen apart previously.
The war in Gaza has supported oil prices due to the potential risk to global supply if the fighting developed into a wider regional conflict.
Michael McCarthy, CEO of investor platform Moomoo Australia and New Zealand, said the Gaza ceasefire was unlikely to change oil supply in the Middle East as the OPEC+ producer group has not hit its increased production targets.
The group, made up of the Organization of the Petroleum Exporting Countries and allies, agreed on Sunday to a November output hike that was smaller than market expectations, easing oversupply concerns.
Prices had gained around 1% on Wednesday to reach a one-week high after investors viewed stalled progress on a Ukraine peace deal as a sign that sanctions against Russia, the world’s second-largest oil exporter, would continue for some time.
Meanwhile, total weekly U.S. petroleum products supplied, a proxy for U.S. oil consumption, rose last week to 21.99 million barrels per day, the most since December 2022, according to a report from the Energy Information Administration on Wednesday.
JP Morgan analysts said global oil demand began on a softer note in October as numerous consumption indicators, including container arrivals at the Port of Los Angeles, truck toll mileage in Germany and container throughput in China, pointed to a moderation in activity.
Global oil demand averaged 105.9 million bpd in the first seven days of October, up 300,000 bpd from last year’s level, though 90,000 bpd lower than JP Morgan’s estimates, its analysts said in a client note.
The pace of global crude and products inventory building has also slowed, expanding by 8 million barrels last week, the slowest increase in the past five weeks, they said.
(Reporting by Stephanie Kelly in London, Florence Tan in Singapore and Georgina McCartney in Houston. Editing by Kim Coghill and Mark Potter)
