Oil Prices Drop amid Gaza Ceasefire Deal

Oil prices fell on Thursday as Yemen’s Houthi militia were expected to halt attacks on ships in the Red Sea, and investors weighed strong U.S. retail sales data, as well as Gaza ceasefire and hostage release deal following more than a wear of war.

Brent crude futures fell 1.29% to $80.97 a barrel after rising 2.6% in the previous session to their highest since July 26.

U.S. West Texas Intermediate (WTI) crude futures fell 1.87% to $78.54 a barrel, after rising 3.3% on Wednesday to their highest since July 19.

U.S. crude futures fell more than $2 during the session.

Latest Oil Prices:

WTI Crude $78.94       +0.33%

Brent Crude  $81.29   -0.90%

Murban Crude $83.93 +0.35%

Louisiana Light $82.07  +3.08%

Bonny Light $78.62   -2.84%

Mars US $73.93         -1.64%

Gasoline $2.119        -0.19%

Natural Gas $4.279  +0.49%

Maritime security officials said on Thursday they expected the Houthi militia to announce a halt to attacks on ships in the Red Sea, following a ceasefire agreement in the Gaza war between Israel and the militant group Hamas.

The attacks have disrupted global shipping, forcing companies to reroute longer and more expensive journeys around South Africa for more than a year.

Elsewhere, U.S. retail sales rose in December as households bought motor vehicles and a range of other goods, pointing to strong demand in the economy.

U.S. crude futures extended losses after investors interpreted the data as reinforcing the Federal Reserve’s cautious approach to cutting interest rates this year.

Prices recovered some ground after comments from Fed Governor Christopher Waller that inflation is likely to continue to ease and could allow the U.S. central bank to cut rates sooner and faster than expected.

Lower interest rates could spur economic growth and boost demand for oil.

Investors also continued to assess the latest round of sanctions imposed by the Biden administration targeting Russia’s military-industrial base and evasion schemes, after broader sanctions were imposed on Russian oil producers and tankers. Now Moscow’s top customers around the world are looking for alternative barrels, while freight rates have also risen.

With Donald Trump being sworn in for a second term on Monday, the market is “getting into a ‘wait-and-see’ phase and waiting for the next U.S. administration to react to the issue” of sanctions.

Higher oil prices could also lead to clashes between Trump and the Organization of the Petroleum Exporting Countries (OPEC), if the next president follows his previous playbook.

During his first term, Trump called on the producer group to rein in prices whenever Brent crude rose to around $80 a barrel.

On the demand side, global oil expanded by 1.2 million bpd in the first two weeks of 2025 compared with the same period a year earlier, slightly less than expected, according to JPMorgan analysts in a note.

Analysts expect oil demand to grow by 1.4 million bpd year-on-year in the coming weeks, driven by increased travel activity in India, where a huge festival is being held, as well as travel for the Lunar New Year celebrations in China in late January.