HOUSTON (Reuters) – Oil prices settled over $2 lower on Friday at their lowest level since mid-June as investors eyed a possible ceasefire in Gaza, while a strengthened dollar drove values down further.
Brent crude prices settled down $2.48, or 2.9 per cent, to $82.63 a barrel. US West Texas Intermediate (WT) crude futures dropped $2.69, or 3.3pc, to $80.13.
US Secretary of State Antony Blinken said a long-sought ceasefire between Israel and the Palestinian militant group Hamas was within sight.
"I believe we're inside the 10-yard line and driving toward the goal line in getting an agreement that would produce a ceasefire, get the hostages home and put us on a better track to trying to build lasting peace and stability," Blinken said, using a football analogy.
The war in Gaza has led investors to price in a risk premium when trading oil, as tensions threaten global supplies.
If a ceasefire is reached, the Iran-backed Houthi rebels could ease their attacks on commercial vessels in the Red Sea, since the group declared the attacks in support of Hamas.
"Geopolitics is starting to ease just a little bit so that ought to work in our favour, following the news of this ceasefire," said Tim Snyder, chief economist at Matador Economics.
The United Nations' highest court said Israel's occupation of Palestinian territories and its settlements there are illegal and should be withdrawn as soon as possible, further buoying hopes of an end to the conflict.
The US dollar index climbed after stronger-than-expected data on the US labour market and manufacturing this week, pressuring oil prices, said Phil Flynn, an analyst at Price Futures Group.
A stronger US currency dampens demand for dollar-denominated oil from buyers holding other currencies.
Chinese officials acknowledged the sweeping list of economic goals reemphasized at the end of a Communist Party meeting this week contained "many complex contradictions", pointing to a bumpy road for policy implementation.
China's economy grew by a slower-than-expected 4.7pc in the second quarter, official data showed, sparking concerns over its demand for oil.
Lending some support to prices, energy services firm Baker Hughes said oil rigs fell by one to 477 this week, their lowest since December 2021.
A global tech outage disrupted operations in multiple industries, with airlines halting flights, some broadcasters going off air and sectors from banking to healthcare hit by system problems.
Meanwhile, two large oil tankers were on fire after colliding near Singapore.
Singapore is Asia's biggest oil trading hub and the world's largest bunkering port. Its surrounding waters are vital trade waterways between Asia and Europe and the Middle East and among the busiest global sea lanes.