Oil Declines With Gaza Peace Plan and Risk-Off Mood in Focus

Core Insights - Oil prices have edged lower due to cooling tensions in the Middle East and a cautious tone in broader markets [1] - A truce between Israel and Hamas has been reached, which may help stabilize the region and reduce disruptions in oil supply [1] - Crude oil prices are fluctuating around the $65 to $70 range, with OPEC+ increasing supplies but limited impact on prices due to China's inventory hoarding [2] Market Sentiment - Market sentiment remains subdued, influenced by concerns over a significant surplus in Q4 and slowing Chinese crude purchases [3] - The dollar's strength has made commodities priced in USD less attractive, contributing to the downward pressure on oil prices [3] Geopolitical Factors - The US Treasury Department has sanctioned over 50 individuals and entities involved in Iranian oil sales, which may affect market dynamics depending on the situation in Gaza [4] - Observers, including the International Energy Agency, predict a major surplus in the oil market in the coming months, with Goldman Sachs forecasting Brent to average $56 next year [5] Price Adjustment Dynamics - While the consensus is bearish due to surplus expectations, there is differing conviction on the extent of price declines, influenced by slower non-OPEC+ growth and geopolitical risks from major producers like Russia and Iran [6]