Oil prices edge down as risk premium fades after Gaza deal

Core Insights - Oil prices have declined due to a reduction in market risk premium following a ceasefire agreement between Israel and Hamas, which is expected to ease concerns about crude transport through key waterways [1][3][5] Group 1: Market Reactions - Brent crude futures fell by 16 cents (0.25%) to $65.06 per barrel, while U.S. West Texas Intermediate crude decreased by 7 cents (0.11%) to $61.44 [1] - Both crude benchmarks are on track for weekly gains, with Brent up approximately 1% and WTI about 0.6% [4] Group 2: Geopolitical Developments - The ceasefire agreement includes a partial withdrawal of Israeli forces from Gaza and the release of hostages by Hamas in exchange for hundreds of Palestinian prisoners held by Israel [3] - The agreement is part of a broader peace initiative led by U.S. President Donald Trump [3] Group 3: Supply and Demand Dynamics - The market's focus is shifting back to potential oil surplus as OPEC continues to unwind production cuts, despite a smaller-than-expected increase in output for November [5][6] - Analysts noted that the recent rise in production has not led to significantly lower prices, indicating that supply concerns may be easing [6] Group 4: Economic Concerns - Investors are apprehensive about a prolonged U.S. government shutdown potentially impacting the American economy and oil demand, as the U.S. is the largest consumer of crude [7]