Oil prices experienced a decline of over 2 per cent on Thursday, driven by unverified reports suggesting a ceasefire between Israel and Hamas.
These rumours, coupled with a significant U.S. refinery shutdown due to a power outage, contributed to the drop in prices.
Despite a Qatari official’s denial of a ceasefire, reports indicated that Hamas had responded positively to a ceasefire proposal earlier in the week.
Brent crude futures fell by $1.85 (2.5%) to settle at $78.70 per barrel, while U.S. West Texas Intermediate crude futures dropped by $2.03 (2.7%) to $73.82.
Recent tensions in the Middle East, particularly attacks by Yemen-based Houthi forces on Red Sea vessels, had previously led to an increase in oil prices. The Houthi group reaffirmed its intention to target U.S. and British warships, citing self-defense.
OPEC+ has been implementing voluntary oil production cuts of 2.2 million barrels per day since November, aiming to stabilize oil prices. Earlier, oil prices saw an uptick following Federal Reserve Chair Jerome Powell’s announcement of expected interest rate declines and a positive economic outlook.
Despite the significant drop, Nigeria remains above water, as the current oil prices are still higher than the budgeted benchmark of $77.96 per barrel for 2024. OPEC had cut Nigeria’s production quota for 2024 below the budget’s target, but discussions on extending these production cuts are expected in the coming months.
