West Texas Intermediate (WTI) crude oil fell to around $61.20 during early Asian trading hours on Friday, extending its decline as geopolitical tensions in the Middle East eased. Market participants are also keeping an eye on the ongoing U.S. government shutdown and its potential duration.
According to Bloomberg, Israel has started implementing a ceasefire in Gaza after reaching an agreement with Hamas to release all remaining hostages. The deal includes a halt in hostilities, a partial withdrawal of Israeli forces, and the exchange of hostages for hundreds of Palestinian prisoners. As tensions cool in the Middle East—home to nearly one-third of the world’s crude supply—oil prices face downward pressure.
Meanwhile, the U.S. government shutdown entered its tenth day after lawmakers failed to agree on spending measures to reopen federal operations. President Donald Trump stated Thursday that his administration may use the shutdown as an opportunity to permanently reduce several programs favored by Democrats. Prolonged political gridlock could weigh on economic activity and reduce U.S. oil demand.
However, WTI prices may find some support from ongoing risks related to the Russia-Ukraine conflict. Investors fear that continued deadlock in peace negotiations could lead to additional sanctions on Russian energy exports, potentially tightening global oil supply and providing a partial offset to recent bearish sentiment.
