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HomeEconomyOil prices edge lower on false rumours Israel agrees to ceasefire proposal

Oil prices edge lower on false rumours Israel agrees to ceasefire proposal

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By Stephanie Kelly

NEW YORK (Reuters) -Oil prices reversed gains on Thursday and edged lower after false market speculation that Israel agreed to a Gaza ceasefire proposal.

Instead, a Qatar official told Reuters that Hamas has received a ceasefire proposal positively, but it has not yet responded to it.

Oil prices fell 2% on the false speculation but have since pared losses.

Brent crude futures edged lower 16 cents to $80.39 a barrel at 1:49 p.m. EST (1849 GMT), while U.S. West Texas Intermediate crude futures fell 9 cents at $75.76.

Tensions in the Middle East have recently boosted oil prices. Worries persist over attacks by Yemen-based Houthi forces on shipping in the Red Sea that are driving up costs and disrupting global oil trading. The Houthi group also said it would keep up attacks on U.S. and British warships in what it called acts of self defence.

“The energy market remains on edge as it waits for a U.S. response to the drone attack on American troops in Jordan,” ANZ Research said in a note.

Earlier, two OPEC+ sources said the group would decide in March whether or not to extend voluntary oil production cuts in place for the first quarter, after a ministerial panel meeting made no changes to the group’s output policy.

OPEC+ currently has 2.2 million barrels per day (bpd) of voluntary oil production cuts, announced in November.

Supporting prices this week, Federal Reserve Chair Jerome Powell on Wednesday said interest rates had peaked and would move lower in coming months, with inflation continuing to fall and an expectation of sustained economic growth.

Lower interest rates and economic growth help oil demand.

Powell declined to promise that rate cuts would come as early as the Fed’s March 19-20 meeting, as investors had hoped.

The U.S. also released on Thursday data showing worker productivity grew faster than expected in the fourth quarter, keeping unit labour costs contained and giving the Fed another boost in the fight against inflation.

U.S. manufacturing stabilized in January amid a rebound in new orders, but inflation at the factory gate picked up.

The Institute for Supply Management (ISM) said on Thursday that its manufacturing PMI increased to 49.1 last month, while economists polled by Reuters had forecast the index dipping to 47.0.

“Data from ISM came in stronger than expected, which is good for oil demand and supportive for prices,” said Phil Flynn, analyst with Price Futures Group.

In China, the world’s second-biggest economy, leaders revealed new support measures to help to reduce fallout from the liquidation of property developer Evergrande.

Analysts at JPMorgan said they expected China to remain the single largest contributor to global oil demand growth in 2024, forecasting that Chinese demand would increase by 530,000 bpd, having jumped by 1.2 million bpd last year.

(Reporting by Stephanie Kelly in New York, Paul Carsten in London, Katya Golubkova in Tokyo and Florence Tan in SingaporeEditing by David Goodman, Mark Potter, Paul Simao and Cynthia Osterman)

Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.

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