Morning Highlights: Oil eases as Gaza ceasefire trims risk premium, focus shifts back to supply outlook

Friday, October 3, 2025

Oil prices edged lower Friday, extending the prior session’s drop as the market’s geopolitical risk premium faded following confirmation of a ceasefire between Israel and Hamas. Traders turned attention back to OPEC+ output plans and U.S. demand signals heading into the weekend.

Market snapshot (06:15 EST):

• WTI (Nov): $60.91 (-$0.60)

• Brent (Dec): $64.60 (-$0.62)

Middle East calm tempers risk

• Israel and Hamas signed a ceasefire deal Thursday in Sharm el-Sheikh, ratified by Israel’s cabinet Friday, marking the first phase of a U.S.-brokered plan to end the war in Gaza.

• The agreement eases concern over disruptions to crude carriers through the Suez Canal and Red Sea, though analysts caution previous peace efforts have faltered.

OPEC+ and supply dynamics

• OPEC+’s smaller-than-expected November output hike eased oversupply fears, but production remains below target for several members.

• Analysts say markets’ expectations for a sharp ramp-up in crude supply have not materialized, contributing to stability despite geopolitical easing.

Russia & India ties in focus

• India’s Nayara Energy, majority-owned by Russia’s Rosneft, is struggling under EU sanctions, reducing refinery runs to 70–80% capacity amid payment and shipping constraints.

• The situation underscores the strain on Russian-linked crude flows and India’s balancing act between Western pressure and energy needs.

Macro backdrop

• U.S. government shutdown risks continue to cloud sentiment, raising concern over economic drag and delayed energy data releases.

• Broader market caution persists as traders weigh shifting geopolitical narratives against still-fragile demand recovery indicators in Asia and Europe.