Oil prices fell on Thursday due to weaker economic growth data from the United States and ongoing negotiations for a ceasefire in the Middle East. Despite a drop in U.S. commercial crude oil inventories that limited further price declines, market sentiment remained cautious.
Price Movements
As of 10:42 AM local time (0742 GMT), Brent crude, the international oil benchmark, decreased by 0.6%, trading at $72.19 per barrel. This is a drop from the previous session’s close of $72.64. Meanwhile, the U.S. benchmark, West Texas Intermediate (WTI), fell by 0.5% to $68.54 per barrel, down from $68.91.
U.S. Economic Data
The U.S. Commerce Department reported on Wednesday that the economy grew by 2.8% in the third quarter of 2024. This figure was below market expectations of 3% growth and down from a 3% expansion in the second quarter of 2024. The disappointing growth data contributed to the downward pressure on oil prices. However, some analysts believe this indicates the U.S. economy is stabilizing ahead of the upcoming presidential elections.
Middle East Ceasefire Negotiations
Additionally, the potential for a ceasefire in the Middle East, a region critical for major oil producers and trade routes, also influenced oil prices. Qatar announced on Tuesday that it is actively mediating efforts to secure a ceasefire in Gaza, expressing optimism about reaching an agreement amid ongoing violence.
“The efforts are ongoing, and we hope for a breakthrough,” stated Majed al-Ansari, a spokesperson for the Qatari Foreign Ministry, during a press conference in Doha. Recent talks have involved key figures, including Israeli Mossad chief David Barnea and CIA Director William Burns, focusing on potential agreements involving prisoner exchanges with Hamas.
U.S. Inventory Data
While oil prices faced pressure from economic data and geopolitical concerns, the U.S. Energy Information Administration (EIA) reported a decrease in commercial crude oil inventories, which helped stabilize prices. U.S. crude oil inventories fell by approximately 500,000 barrels to 425.5 million barrels, contrary to market predictions of a 1.5 million barrel increase for the week ending October 25. Additionally, gasoline inventories dropped by about 2.7 million barrels, bringing the total to 210.9 million barrels.
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