Oil prices drop after Gaza cease-fire agreement, increased OPEC production data

ANKARA

Oil prices fell on Thursday following the announcement of a cease-fire agreement between Israel and Hamas and a report showing higher crude output from the Organization of the Petroleum Exporting Countries (OPEC).

The international benchmark Brent crude decreased by 0.4%, trading at $81.30 per barrel at 10.32 a.m. local time (0732 GMT), down from $81.61 at the close of the previous session.

The US benchmark West Texas Intermediate (WTI) fell by 0.3%, settling at $78.90 per barrel, compared to its prior session close of $79.14.

Qatari Prime Minister and Foreign Minister Mohammed bin Abdulrahman Al-Thani confirmed the cease-fire agreement during a press conference in Doha, which is set to take effect on Sunday.

The agreement outlines an initial 42-day phase, including the release of 33 Israeli detainees in exchange for a number of Palestinian prisoners. This marks a key development on the 467th day of Israel’s ongoing military operation in Gaza, which has killed and wounded 156,000 Palestinians, the majority of them women and children.

The cease-fire agreement has eased supply concerns in the Middle East, a region that holds a significant portion of the world’s oil reserves, contributing to a drop in oil prices.

Meanwhile, OPEC’s latest report pointed to a rise in crude production, further weighing on prices. According to the organization’s monthly oil market report released Wednesday, OPEC’s output increased by 26,000 barrels per day (bpd), or 0.1%, in December 2024, reaching an average of 26.74 million bpd.

The additional supply alleviated concerns over potential market disruptions, pushing prices lower.

OPEC's unchanged forecast for the increase in global oil demand for this year also pressured oil prices.

OPEC’s decision to keep its 2025 global oil demand growth forecast unchanged also added pressure on prices. The group expects oil demand to grow by 1.45 million bpd this year, reaching 105.2 million bpd, less than anticipated, which dampens the outlook for price increases.