Oil down amid growing cease-fire possibilities in Gaza

Oil prices decreased on Thursday following strengthening expectations of a cease-fire in the Middle East and demand concerns from China, while a positive demand outlook in the US, supported by inventory data from the Energy Information Administration (EIA) limited further price falls.

International benchmark Brent crude traded at $81.04 per barrel at 10.19 a.m. local time (0719 GMT), a decrease of 0.8% from the closing price of $81.71 per barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $76.97 per barrel at the same time, a 0.8% fall from the previous session that closed at $77.59 per barrel.

Both benchmarks fell on Thursday due to growing expectations of a cease-fire in the Middle East, home to a vast majority of global oil reserves, by relieving market players' supply concerns.

According to Israeli media reports on Sunday, it is stated that an Israeli negotiating team will leave for Qatar on Thursday to continue talks on a Gaza cease-fire and prisoner swap deal with Palestinian factions.

A statement by Israeli Prime Minister Benjamin Netanyahu said he held "in-depth discussions" Sunday on efforts to reach a prisoner swap deal with Hamas.

Meanwhile, oil prices continue to be depressed by slower-than-expected economic growth data in China, the world's largest importer of crude oil, which raised concerns about the country's oil demand.

The gross domestic product (GDP) of China rose by 4.7% in the second quarter of 2024, below market expectations, according to official data, which followed figures showing a softness in oil imports.

Uncertainty over the country's oil demand fuels market players’ fears that imports and refining activity could also remain low.

However, data indicating a drop in crude stocks in the US, the world's largest oil-consuming country, limited downward price movements by suggesting that oil demand was increasing.

According to data released by the EIA late Wednesday, US commercial crude oil inventories decreased by 3.7 million barrels to 436.5 million barrels during the week ending July 19.

The drop in inventory was well above the market prediction of around 2.6 million barrels.