Oil declines with Gaza peace plan and US inventories in focus

09/10/2025 03:30 AST

Oil edged lower as traders focused on cooling tensions in the Middle East and higher US inventories.

Brent fell below $66 a barrel on Thursday after rising more than 1% on Wednesday, while West Texas Intermediate was near $62.

Israel and Hamas agreed terms for the release of all hostages held by the militant group in Gaza, a major breakthrough in the US- and Qatari-brokered talks to end the two-year war. President Donald Trump said he may soon visit Israel.

Elsewhere, US nationwide crude stockpiles expanded for a second week, although they remained near seasonal lows, according to official data released on Wednesday.

Still, levels at the Cushing, Oklahoma, storage hub declined, as did inventories of refined products.

Crude remains under pressure on expectations for higher supplies, both from the Organization of the Petroleum Exporting Countries and its allies, as well as from the Americas.

Beyond the Middle East, geopolitical concerns remain pertinent, with Ukrainian attacks on Russian oil infrastructure affecting flows.

Many Wall Street banks and other observers including the International Energy Agency have predicted that the market will swing to a surplus in the coming months. Among them, Goldman Sachs Group Inc. expects Brent to average $56 a barrel next year as global production runs ahead of demand.

While consensus remains bearish given expectations for a surplus, "conviction differs on the depth of downside," Citigroup Inc. analysts including Francesco Martoccia said in a note.

Slower non-OPEC+ growth and greater OPEC+ optionality, along with heightened geopolitical risks looming on large producers such as Russia and Iran, could temper the pace of price adjustment, they said.

Gulfnews