Oil settles flat on the week over Gaza ceasefire possibility, stronger US dollar; Brent sticks at $85/bbl

Brent futures for May delivery settled at $85.43, losing 35 cents. US crude settled at $80.63 a barrel, falling 44 cents. Both benchmarks logged less a than one per cent change on the week, according to news agency Reuters.

Coming to domestic prices, crude oil futures settled 0.04 per cent higher at ₹6,749 per barrel on the multi commodity exchange (MCX).

What’s pushing crude oil prices?

Analysts said that successful peace talks would prompt Yemen’s Houthi rebels to allow oil tankers to pass through the Red Sea. Blinken met Arab foreign ministers and Egypt’s President Abdel Fattah El-Sisi in Cairo as negotiators in Qatar centred on a truce of about six weeks.

Meanwhile, the US dollar was set for a second week of broad gains after the Swiss National Bank’s surprise interest rate cut on Thursday bolstered global risk sentiment. A stronger dollar makes oil more expensive for investors holding other currencies, dampening demand.

While a possible ceasefire meant crude might move more freely globally, a lower US oil rig count and the potential for easing US interest rates helped support prices. The US oil rig count fell by one to 509 this week, according to Baker Hughes data, indicating lower future supply. US equities, which tend to move in correlation with oil prices, hit record highs after the Federal Reserve ended its regular meeting with no change in key rates.

The conflict in Eastern Europe also kept oil prices from moving lower. Russia launched the largest missile and drone attack on Ukrainian energy infrastructure of the war to date on Friday, hitting the country’s largest dam and causing blackouts in several regions. A steeper discount could make Russian crude more attractive to international buyers.

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Published: 23 Mar 2024, 06:49 PM IST