Oil Prices Slide as Middle East Deal Optimism Reduces Supply Risk

Oil prices took a sharp hit on Wednesday as optimism about a potential diplomatic deal in the Middle East grew, reducing concerns over supply disruptions.

According to ING analysts, market expectations of a ceasefire or broader agreement led to a decrease in the geopolitical risk premium that had been supporting prices.

Brent crude dropped by more than 3% during trading, while West Texas Intermediate (WTI) also saw significant losses.

ING's commodity strategy team noted that while optimism is high, the market remains sensitive to headlines and any setback in talks could quickly reverse the downward move.