Oil prices hover near $87 as truce between Israel and Hamas continues to hold

LONDON – Oil prices drifted lower Friday as a ceasefire agreement between Israel and the militant group Hamas continued to hold.

Benchmark West Texas Intermediate crude for January delivery was down 28 cents to US$87.10 a barrel at midday in London in electronic trading on the New York Mercantile Exchange.

The contract rose 63 cents to finish at $87.38 per barrel Wednesday. Markets were closed Thursday for the U.S. Thanksgiving holiday.

Israel launched an offensive on Nov. 14 to halt rocket fire from Gaza, unleashing some 1,500 airstrikes on Hamas-linked targets, while Hamas and other Gaza militants showered Israel with just as many rockets.

A truce reached Wednesday was still intact, easing fears of an escalating war that could spill beyond Gaza and eventually disrupt oil supplies.

“I think it’s a bit of reaction to the ceasefire in the Middle East,” said Ric Spooner, chief market analyst at CMC Markets in Sydney, Australia.

Brent crude, used to price international varieties of oil, fell 33 cents to US$110.53 a barrel in London.

In other energy futures trading in New York, heeating oil fell two cents to US$3.06 a U.S. gallon (3.79 litres),wholesale gasoline rose four cents to US$2.75 a gallon and natural gas was steady to $4.02 per 1,000 cubic feet.

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