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Weekly Oil Prices

Crude oil price retreats as Middle East tensions ease.

Oil prices declined further this week as the market’s war-related risk premium eased following Israel and Hamas’ agreement on the initial phase of a Gaza ceasefire plan.

Israel and the Palestinian militant group Hamas reached a ceasefire agreement on Thursday, marking the first phase of U.S. President Donald Trump’s plan to end the Gaza war.

Under the deal, ratified by Israel’s government on Friday, attacks will halt, Israel will begin a partial withdrawal from Gaza, and Hamas will release all remaining hostages taken during the initial attack that triggered the war, in exchange for hundreds of Palestinian prisoners held by Israel.

The Gaza ceasefire marked a significant step toward ending the two-year war that had heightened concerns over potential oil supply disruptions.

With geopolitical risks easing, market attention has shifted back to the looming oil surplus as OPEC+ moves ahead with plans to unwind its production cuts.

A smaller-than-anticipated output increase for November, agreed upon by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) on Sunday, helped ease some fears of oversupply and offered some support oil prices.

OPEC+ announced a production adjustment plan to increase oil output by 137,000 barrels per day (bpd) starting in November 2025. This decision comes as part of OPEC+‘s ongoing strategy to balance global oil markets amid steady economic outlooks and healthy market fundamentals, including low oil inventories.

Meanwhile, the U.S. Energy Information Administration (EIA) and other forecasters highlighted the risk of rising global crude inventories this week as production growth outpaces demand recovery. The EIA expects oil inventories to increase significantly through next year, exerting downward pressure on oil prices beyond the short term.

Softening demand, driven by slower economic growth, seasonal factors, or improved energy efficiency, could add to the decline in oil prices. Several analysts have warned that if the ceasefire remains in place and supply continues to exceed demand, oil prices could fall significantly below current levels.

Some welcome news for fuel cards prices which will fall by 1.8 pence per litre for next week.

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