Oil prices fell for a third day on Wednesday amid increasing hopes of a ceasefire agreement in the Middle East and rising crude inventories and production in the US, the world’s biggest oil consumer.
Brent crude futures for July fell 70 cents, or 0.8 percent , to $85.63 a barrel. US West Texas Intermediate crude for June declined 75 cents, or 0.9 percent , to $81.18 per barrel.
Expectations that a ceasefire agreement between Israel and Hamas could be in sight, following a renewed push led by Egypt to revive stalled negotiations between the two, pushed oil prices lower.
“The potential for a ceasefire agreement between Israel and Hamas has eased concerns of an escalation of the conflict and any possible disruptions to supply,” ANZ analysts said in a note on Wednesday.
However, Israeli Prime Minister Benjamin Netanyahu vowed on Tuesday to go ahead with a long-promised assault on the southern Gaza city of Rafah, whatever the response by Hamas to the latest proposals for a halt to the fighting and a return of Israeli hostages.
Also pressuring prices were swelling US crude oil inventories and rising crude supply.
