Oil prices decline for third day as Gaza ceasefire continues to stall
2 Min Read
Since July, crude prices have seen a combined drop of about 10%, nearly erasing the gains made earlier in the year.
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Netherlands-flagged dredger Vox Maxima is anchored off the coast of Sentosa Island in Singapore, on Sunday, June 16, 2024. (AP)
Crude oil prices dropped for a third consecutive day on Tuesday amid stalling efforts to reach a ceasefire agreement in Gaza, which had previously fueled the 2024 oil rally due to heightened tensions in the Middle East.
After completing a visit in Egypt on Tuesday, US Secretary of State Antony Blinken was headed to Qatar in a bid to mediate a ceasefire talks.
But the negotiations faced complications following the discovery of six captives' bodies by Israeli forces, who died as a result of Israeli bombardment back in March.
Initially, the war on Gaza had been a bullish factor for the oil market, with crude prices surging from January to March due to disruptions linked to the war, particularly in the oil-rich Middle East.
However, the situation began to change in late June as international diplomatic efforts aimed at securing a ceasefire in Gaza started to gain traction.
Read more: Crude oil prices face biggest weekly drop since April
Since July, crude prices have seen a combined drop of about 10%, nearly erasing the gains made earlier in the year.
Market analysts suggest that this downward trend could continue, potentially driving prices into negative territory if a ceasefire is fully implemented.
Scott Shelton, a crude oil broker at ICAP in Durham, North Carolina, noted the potential for short-term rallies if ceasefire negotiations falter, but indicated that the broader trend is likely to see crude prices continue their decline.
"Oil's performance versus other commodities has been weak... This suggests that oil should continue to drop," Shelton told Sputnik.
On Tuesday, West Texas Intermediate (WTI) crude settled 0.4% lower at $74.04 per barrel, extending a 5% decline over the previous two sessions and hitting a two-week low of $72.56 earlier in the day.
Despite a rally earlier in the year, WTI is now only up about 2% year-to-date. Similarly, Brent crude ended the session down 0.6% at $77.20 per barrel, also reaching a two-week low and reducing its year-to-date gain to just 0.4%, down from a 20% increase earlier.
