Global oil benchmarks declined in early Asian trading on Friday following U.S. announcements that a ceasefire had been reached between Israel and Lebanon - a development that traders interpreted as reducing geopolitical risk in the Middle East.
Price moves
West Texas Intermediate crude futures fell 1.4% to $89.88 a barrel by 19:14 ET (23:14 GMT) and were trading down more than 3% for the week. The drop came as market participants increasingly priced in the likelihood of further de-escalation across the region.
Ceasefire and diplomacy
U.S. officials said a 10-day ceasefire between Israel and Lebanon had been agreed following meetings in Washington. The U.S. also indicated plans to invite Israeli Prime Minister Benjamin Netanyahu and Lebanese President Joseph Aoun to the White House for talks. By the early hours of Friday the ceasefire appeared to be holding, and its inclusion of Lebanon - a key demand from Iran - contributed to optimism about a broader reduction in hostilities.
"I hope Hezbollah acts nicely and well during this important period of time," President Donald Trump wrote on social media, referring to the Lebanese paramilitary group that has been engaged with Israel.
Signs of progress with Iran
President Trump also reported optimism about Iran, saying Tehran had agreed to hand over its uranium holdings. Despite that statement, the U.S. naval blockade of Iran remained in place and U.S. military officials maintained the possibility of further action, indicating that restraints on escalation persisted alongside diplomatic signals.
Market commentary noted that the ceasefire between Israel and Lebanon had appeared steady, with no fresh reports of strikes for nearly a week. The initial ceasefire term runs until April 21, and President Trump suggested the agreement could be extended.
Market drivers
Prices were pressured not only by the immediate ceasefire but also by rising expectations that the United States and Iran could resume talks before the current ceasefire expires. In addition, projections from major industry groups indicating weaker global oil demand contributed to the downward pressure on crude.
Investors and energy market participants continued to weigh both the diplomatic developments and demand forecasts, with the combined effect driving crude lower in early Asian trade.
Note: The article reflects developments as reported by U.S. announcements and market observations related to oil pricing, ceasefire arrangements, and demand outlooks.