Crude oil prices closed lower on Tuesday, extending losses before volatile trading after Israel agreed to a ceasefire deal with Hezbollah that reduced market risk.
Brent crude futures fell 20 cents (0.27%) to $72.81 a barrel. US West Texas Intermediate (WTI) crude futures closed at $68.77 a barrel, down 17 cents (0.25%).
US President Joe Biden said in a statement that the agreement between Israel and Hezbollah took effect on Wednesday.
Israeli Prime Minister Benjamin Netanyahu said he was ready to implement the ceasefire and would respond forcefully to any violation of the agreement by Hezbollah.
On Monday, oil prices fell more than 2% following several reports of rumors about the ceasefire.
However, the ceasefire scenario could pressure crude prices as the US administration is likely to ease sanctions on Iran.
From OPEC's perspective, the organization that controls half of the world's oil output plans to gradually roll out all oil production cuts over several months in 2024 and 2025.
Slowing Chinese demand and rising production have put some restrictions on that plan.
