Brent and WTI fall after ceasefire deal, oil market reacts with relief

Oil prices are falling today following a report that Israel and Lebanon have agreed to extend their ceasefire. At around 13:30 CEST, North Sea Brent was down approximately 2.3 percent, trading close to 95,50 dollars per barrel. US light crude West Texas Intermediate (WTI) was down roughly 2.2 percent, falling below 94 USD per barrel.

The agreement to extend the ceasefire between Israel and Lebanon has raised hopes of a broader peace deal that would end the Israeli-American war with Iran and allow shipping through the Strait of Hormuz to resume. Under normal circumstances, about a fifth of global oil supplies pass through the strait.

"Iran insists that Israeli aggression against Lebanon must stop, and there appears to have been a genuine breakthrough on this front," John Evans, an analyst at PVM Oil, said, according to Reuters.

Oil prices rose by around two percent on Wednesday amid new attacks in the Middle East, including an Iranian strike on Kuwait International Airport.

US President Donald Trump suggested on Wednesday that progress in talks with Iran could come over the weekend. Iranian Foreign Minister Abbas Araghchi said on Wednesday that contacts with Washington had not been interrupted, but added that no progress had been made in the negotiations.

Oil prices in dollars per barrel (about 159 litres)