Oil prices fell on Friday after the Islamist group Hamas freed two US hostages from Gaza, leading to hopes that the Israeli-Palestinian crisis could ease without engulfing the rest of the Middle East region and disrupting oil supplies.
Brent crude oil futures fell 22 cents, or 0.2 per cent, to settle at US$92.16 per barrel.
U.S. West Texas Intermediate crude futures for November delivery, which expired after Friday’s settlement, fell 62 cents, or 0.7 per cent, to $88.75 a barrel. The more active December WTI contract closed 29 cents lower at $88.08 a barrel.
Hamas’ armed arm released two US hostages in Gaza – a mother and her daughter – “on humanitarian grounds” in response to Qatar’s mediation efforts in the war with Israel, its spokesman Abu Ubaida said on Friday.
“The report has taken some of the risk premium out of the market,” said Phil Flynn, an analyst at Price Futures Group. “The market has gone from starting the day with little hope to possible signs that there may be some way out of this crisis.”
Both contracts had gained more than a dollar a barrel during the session, with signs of the conflict escalating. During the week, both front-month contracts rose by more than 1 per cent, a second consecutive weekly jump.
“The Middle East continues to be a major focus for the market due to fears of a conflict in the region, which would likely involve an interruption in oil supplies,” said John Kilduff, a partner at Again Capital, based in New York.
Supply disruptions may be less likely now, Kilduff added, but “the market can’t ignore them – especially heading into the weekend, when things can change quickly and there will be no trading.”
Also supporting prices were forecasts of a tighter market in the fourth quarter, after the main producers, Saudi Arabia and Russia, extended supply cuts until the end of the year.
Large stocks, mainly in the US, support the thesis of a market with little supply, said UBS analyst Giovanni Staunovo.
UBS expects Brent prices to trade in the range of $90 to $100 per barrel in the coming sessions, Staunovo added.
Money managers reduced their net long positions in US oil futures and options by 56,850 contracts to 183,351 in the week to 17 October, the US Commodity Futures Trading Commission (CFTC) said on Friday 20 October.
O.Económico
