Oil prices fall on hopes for a political solution in Gaza
Read full post at forexlive.com
WTI crude oil daily
It’s not clear how much political risk is currently priced into the oil market but we may soon find out.
CNN reports that Hamas is considering a new framework proposed by Egypt that
calls for the group to release as many as 33 hostages kidnapped from
Israel in exchange for a pause in hostilities in Gaza. A slow release over several weeks and the release of Palestinian prisoners could lead to a durable calm in the area.
Hamas is also joining talks in Cairo, in a hopeful sign.
The news has prompted some selling in oil today with WTI down $1.26 to $82.59, which is the lowest since Thursday.
Some estimate as much as an $8 premium in oil prices due to geopolitics but I think it’s much lower, particularly after the Iran-Israel fighting last week fizzled. However there’s no real way of knowing until/unless we get a ceasefire deal.