Oil Prices Down on Ceasefire Hopes, Strong Dollar

22 Mar 2024 , 09:32 AM

In early Asian trading on Friday, oil prices experienced a decline amid the potential for a ceasefire in Gaza, which could lead to increased global supply. Additionally, a stronger U.S. dollar and weakening gasoline demand contributed to subdued sentiment.

Brent crude futures dropped by 18 cents to $85.60 per barrel, while U.S. crude futures shed 19 cents to $80.88 per barrel.

U.S. Secretary of State Antony Blinken’s remarks on Thursday about the possibility of a Gaza ceasefire agreement during talks in Qatar raised expectations of additional global oil supply. Negotiations in Qatar focused on achieving a ceasefire lasting approximately six weeks.

In the United States, the world’s largest oil consumer, gasoline product supplied, an indicator of demand, fell below 9 million barrels for the first time in three weeks, suggesting a potential slowdown in crude demand. U.S. gasoline futures remained unchanged at $2.7227 per gallon.

Furthermore, the U.S. dollar, which typically trades inversely with oil prices, strengthened following a surprise interest rate cut by the Swiss National Bank. This bolstered global risk sentiment but made crude more expensive for international buyers.