Crude oil prices dropped sharply following a ceasefire between Iran and Israel, brokered by the United States. Brent crude fell to $67.14 per barrel, and West Texas Intermediate dropped to $64.37, both losing about 6%. The market reacted quickly as fears of disruption to Middle Eastern oil supplies began to ease with news of the truce.
The sudden price drop marked a reversal of the geopolitical risk premium that had built up over weeks of heightened tension. Iranian threats to close the Strait of Hormuz, a key global oil route, had previously driven up concerns and prices. The ceasefire, though fragile with some reported violations, seems to have calmed those fears for now.
Adding to the bearish trend were signs of economic softness in the United States. Consumer confidence has been slipping due to ongoing trade uncertainties and job market worries. This led traders to anticipate weaker demand for oil, reinforcing the downward pressure on prices globally.
Further compounding the decline was increased oil output from Kazakhstan and Guyana, which offered a buffer against any potential supply shocks. The market has responded to a combination of easing geopolitical tensions and growing output, suggesting that for now, oil prices may remain under pressure.
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