WTI declines below $79.00 as prospects improve for a Gaza ceasefire

• WTI price loses ground to near $78.85 in Thursday’s Asian session.
• Israel and Hamas agreed to a ceasefire deal, weighing on the WTI price.
• US crude oil inventories declined by 1.962 million barrels last week, according to the EIA. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $78.85 on Thursday. The WTI price edges lower as improved prospects for a ceasefire between Hamas and Israel could ease geopolitical tensions in the Middle East, which weigh on the WTI price.  

According to an official, Israel and Hamas agreed to a deal to halt fighting in Gaza and exchange Israeli hostages for Palestinian prisoners. An ending of conflicts between Israel and Hamas will ease tensions in the Middle East and reduce the threats of disruption to crude supplies in the region. This, in turn, could undermine the black gold price. 

However, US crude oil stockpiles extend decline, which might cap the downside for the WTI price. The US Energy Information Administration weekly report showed crude oil stockpiles in the United States for the week ending January 10 decreased by 1.962 million barrels, compared to a decline of 959K barrels in the previous week. The market consensus estimated that stocks would fall by 1.6 million barrels. 

Oil traders await the release of US Retail Sales for December and weekly Initial Jobless Claims for fresh impetus, which are due later on Thursday. In case of a weaker-than-expected outcome, this could drag the Greenback lower and lift the USD-denominated commodity price.