Oil fell on possible Gaza ceasefire and Dollar gaining strength

Oil prices slipped on Friday on the possibility of a nearing Gaza ceasefire that could ease geopolitical concerns in West Asia, while a stronger dollar and faltering U.S. gasoline demand also weighed on prices.

On March 22, oil prices felt the brunt of the ceasefire possibility in Gaza, further pulled down by a stronger dollar and low U.S. Gasoline demand.

Regarding futures contracts, Brent Crude was quoted at $85.36 a barrel, fell 0.5%. Similarly, US crude futures shed 0.5% to trade at $80.67 a barrel.

After rising over 3% last week, both Brent and WTI are set to end the week on a tweaked note.

Oil fell on the back of U.N. drafting resolution to call for a ceasefire in Gaza and as another round of profit-taking kicked in, IG analyst Tony Sycamore said.

U.S. Secretary of State Antony Blinken said that expectations are Qatar talks could reach a Gaza ceasefire agreement between Israel and Hamas, which will ease geopolitical tensions in the region. Blinken was the negotiator between Arab foreign ministers and Egypt’s President Abdel Fattah El-Sisi for Qatar centered on a truce of about six weeks.

However, FGE said preliminary weekly data for the first half of March showed on-land crude and main product stocks at major oil hubs globally falling by almost 12 million barrels, compared to the 2015 to 2019 average draw of 6 million barrels, which could be bullish for oil.

Also, the US Dollar rose after the Swiss National Bank interest rate cut came in as a surprise bolstering global risk sentiment. A stronger dollar makes oil more expensive for investors holding other currencies, dampening demand.