Oil extends drop on glut outlook, prospect for end to Gaza war

Oil pushed lower for a second session as the market weighed a looming glut and the possibility for an end to hostilities in Gaza, which could siphon some of the war premium out of prices.

West Texas Intermediate slipped toward $63 a barrel after tumbling 3.5% on Monday, the biggest drop since late June. Brent closed near $68. The OPEC+ alliance meets on Sunday and is likely to agree to raise output in November, though at a modest rate similar to that for October.

The US and Israel, meanwhile, agreed to a 20-point plan to end the war in Gaza, but the prospects for peace remained unclear without the direct involvement of Hamas. President Donald Trump said the framework had the support of other leaders in the Middle East during a press conference on Monday.

Oil has pulled back from last week’s highs when traders covered long positions ahead of the weekend to hedge against mounting threats to Russian energy infrastructure by Ukraine. Futures are on track for modest monthly losses.

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