Oil prices Dropped on Friday because the group Hamas released two American hostages from Gaza. People are now hoping that the situation between Israel and Palestine won’t get worse, and that this won’t disrupt the oil supply.
The price of Brent crude oil went down by 22 cents to $92.16 a barrel.
The price of U.S. West Texas Intermediate crude oil for November delivery went down by 62 cents to $88.75 a barrel. The price for December delivery went down by 29 cents to $88.08 a barrel.
Hamas released the two American hostages for humanitarian reasons as part of efforts by Qatar to end the conflict with Israel.
This news reduced some of the risk in the oil market, as it went from having little hope at the start of the day to seeing possible signs of a way out of the crisis.
Both oil contracts had gone up by more than a dollar per barrel earlier in the day due to concerns about the conflict. For the week, both oil prices rose by over 1%, the second weekly increase in a row.
There were also concerns about the Middle East leading to a conflict that could disrupt oil supplies, but that seems less likely now.
Prices were also supported by predictions that the oil market would get tighter in the fourth quarter because major oil producers, like Saudi Arabia and Russia, extended their supply cuts to the end of the year.
Large reductions in oil inventories, mainly in the United States, show that there might not be enough oil to meet demand, according to UBS analyst Giovanni Staunovo.
UBS expects Brent oil prices to stay between $90 and $100 per barrel in the coming weeks.
Money managers reduced their bets on rising U.S. oil prices by a significant amount in the week ending on October 17, according to the U.S. Commodity Futures Trading Commission (CFTC).
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