Oil depreciated at the global market on Thursday amid plans to halt attacks on ships in the Red Sea as investors weighed strong US retail sales data.
Brent crude futures lost 74 cents or 0.9 per cent during the session to finish at $81.29 per barrel and the US West Texas Intermediate (WTI) crude futures went down by $1.36 or 1.7 per cent to $78.68 a barrel.
Reuters reported that officials were expecting the Houthi militia to announce a halt in its attacks on ships in the Red Sea after a ceasefire deal in the war in Gaza between Israel and the militant Palestinian group Hamas.
Israel and Hamas reached a Gaza ceasefire and hostage release deal following 15 months of war.
Houthi has carried out more than 100 attacks on ships crossing the Red Sea since November 2023, saying they are acting in solidarity with the Palestinians in Gaza. They have sunk two vessels, seized another and killed at least four seafarers.
The attacks have disrupted global shipping, forcing firms to re-route to more expensive journeys around southern Africa for more than a year, making commodities like oil more expensive.
The US Secretary of State, Mr Antony Blinken, said the Gaza Strip ceasefire should start on Sunday as planned, despite the need for negotiators to tie up a loose end.
However, investors remained cautious about the possibility of a breach of the ceasefire deal.
Meanwhile, the US Commerce Department reported U.S. retail sales increased in December as households bought more motor vehicles and a range of other goods, pointing to strong demand in the world’s largest economy.
Support also came after US Federal Reserve Governor Christopher Waller said inflation is likely to continue to ease and possibly allow the U.S. central bank to cut interest rates sooner and faster than expected.
Investors also continued to weigh the Biden administration’s latest round of sanctions targeting Russia’s military-industrial base and sanctions-evasion efforts, after earlier levying broader sanctions on Russian oil producers and tankers.
The market also continued to look forward to possible friction between Donald Trump and the Organisation of the Petroleum Exporting Countries (OPEC).