Brent futures fell nearly 1% after reports of a conditional ceasefire reduced geopolitical risk premiums in oil markets.
Brent crude prices declined to $96.87 per barrel, reversing three consecutive sessions of gains, after reports of a conditional ceasefire between Israel and Lebanon eased geopolitical tensions. The agreement, contingent on Hezbollah halting hostilities, reduced immediate supply disruption fears but left longer-term risks intact due to the blocked Strait of Hormuz.
Earlier, Brent had risen 1.89% to close at $97.81 as skepticism grew over a US-Iran peace deal, keeping inflation concerns alive. The 10-year Treasury yield dipped by 1.4 basis points to 4.48%, reflecting reduced safe-haven demand. Market pricing for a Fed rate hike this year climbed to 81% amid persistent uncertainty.
Despite the ceasefire news, Polymarket odds indicate rising doubt over a swift resolution, sustaining elevated longer-dated Brent futures. Investors remain cautious as geopolitical risks linger, with no clear path to reopening the critical Hormuz shipping lane.