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After Hamas Frees US Hostages, Oil Prices Decline

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Ukrainian Military On Counteroffensive Against Russia: A Breakthrough Photo From: The Israel Times Photo From: Lowly Institute

With optimism that the Israeli-Palestinian conflict may defuse without engulfing the entire Middle East area and upsetting oil supplies, oil prices settled lower on Friday following the release of two American hostages from Gaza by the Islamist group Hamas. Futures for Brent crude dropped 22 cents, or 0.2%, to close at $92.16 a barrel.

Crude Future Expires

November delivery of U.S. West Texas Intermediate crude futures expired following Friday’s settlement, and the contract lost 62 cents, or 0.7%, to $88.75 a barrel. At $88.08 per barrel, the more volatile December WTI contract ended the day 29 cents down.

According to its spokesman Abu Ubaida on Friday, Hamas’ armed wing freed a mother and her daughter, two American prisoners in Gaza, “for humanitarian reasons” in response to Qatar’s attempts to mediate the conflict with Israel.

“Some of the market’s risk premium was removed by the report,” Price Futures Group analyst Phil Flynn stated. “The market went from starting the day with little hope and went to possible signs that there may be some way out of this crisis.”

During the day, both contracts had gained more than one dollar per barrel due to indications that the dispute was getting worse. Both front-month contracts saw weekly increases of more than 1% for the second consecutive week.

Israeli Defence Minister Yoav Gallant announced on Thursday that troops at the Gaza border would soon witness the Palestinian enclave “from inside,” while the Pentagon reported that American missiles intercepted were fired from Yemen towards Israel.

Conflict In Oil Supplies

According to John Kilduff, a partner at Again Capital in New York, “the Middle East remains a big focus of the market because of fears of a region-wide conflict that would likely involve a disruption of oil supplies.”

Hamas

Source: ABC news

Kilduff continued, “the market cannot ignore it – especially heading into the weekend when things could change rapidly and there will be no trading.” Although supply disruptions may be less likely now, he said.

Forecasts of a tightening market in the fourth quarter following supply cuts by big suppliers Saudi Arabia and Russia through the end of the year also helped to strengthen prices.

The idea of an undersupplied market is supported by significant inventory reductions, mostly in the United States, according to UBS analyst Giovanni Staunovo.

According to Staunovo, UBS anticipates that Brent prices will fluctuate between $90 and $100 per barrel during the upcoming sessions.

According to data released on Friday by the U.S. Commodity Futures Trading Commission (CFTC), money managers reduced their net long positions in U.S. crude futures and options by 56,850 contracts to 183,351 in the week ending October 17.

 

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