Oil prices have dropped close to their lowest levels this year, driven by growing optimism over a potential ceasefire proposal in Gaza, which could help ease tensions in the Middle East.
On Tuesday morning, Brent Crude fell below $77 per barrel, marking its lowest point since early August and a decline from over $82 just a week ago.
Although oil briefly touched below $76 three weeks ago, it hasn’t consistently traded at these levels since January.
This drop follows remarks by U.S. Secretary of State Anthony Blinken on Monday, indicating that Israel had accepted a “bridging proposal” towards a ceasefire in Gaza.
Additionally, ongoing concerns about the health of China’s economy are further dampening oil demand.
“Persistent concerns about Chinese demand have been the primary factor weighing on sentiment,” Warren Patterson, head of commodities strategy for ING Group in Singapore, told Bloomberg. “Now the potential for an Israel-Hamas ceasefire has only added to the downward pressure.”
Despite these declines, petrol prices remain around 5p per litre higher at the pump than they were in January, according to the RAC.
