By Stephanie Kelly
LONDON (Reuters) -Oil prices were little changed on Thursday as investors weighed a ceasefire deal in Gaza that could ease 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 down 12 cents to $66.13 a barrel at 0943 GMT. U.S. West Texas Intermediate crude dropped 14 cents to $62.41.
Egypt’s state-affiliated Qahera TV reported a ceasefire deal between Israel and Hamas had officially come into effect after noon in the region (0900 GMT), when the enemies signed it in the Egyptian resort of Sharm el-Sheikh.
Israeli Prime Minister Benjamin Netanyahu’s office said it would take effect only once ratified by the Israeli cabinet, which was scheduled to meet later on Thursday.
Under the deal, fighting will cease, Israel will partially withdraw from Gaza and Hamas will free hostages it captured in the attack that precipitated the war, in exchange for prisoners held by Israel.
‘WIDE-RANGING’ IMPLICATIONS FOR OIL MARKETS
“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.
Galimberti also said 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.