Oil and gas prices tumble following Israel-Iran ceasefire
Oil prices were down over 5%.Â
Oil prices hit their lowest in two weeks on Tuesday after Israel agreed to the US president Donald Trump's proposal for a ceasefire with Iran.
Brent crude futures were down $3.82, or 5.3%, at $67.66 (€58.77) a barrel on Tuesday morning GMT. US West Texas Intermediate crude fell $3.75, or 5.5%, to $64.76 per barrel.
Israel has agreed to Mr Trump's proposal for a ceasefire with Iran after it achieved its goal of removing Tehran's nuclear and ballistic missile threat, prime minister Benjamin Netanyahu said in a statement posted by his office on Tuesday.
Mr Trump had announced on Monday that Israel and Iran had fully agreed to a ceasefire, adding Iran would begin the ceasefire immediately, followed by Israel after 12 hours. If both sides maintain peace, the war will officially end after 24 hours, concluding a 12-day conflict.
Iran is Opec's third-largest crude producer, and the easing of tensions would allow it to export more oil and prevent supply disruptions, a major factor in oil prices jumping in recent days.
Both the oil contracts settled over 7% lower in the previous session after rallying to five-month highs after the US attacked Iran's nuclear facilities over the weekend, stoking fears of a broadening in the Israel-Iran conflict.
The direct US involvement in the war had also focused investors squarely on the Strait of Hormuz, a narrow and vital waterway between Iran and Oman, through which between 18 and 19 million barrels per day of crude oil and fuels flow, nearly a fifth of the world's consumption.
Concerns were growing any disruption to maritime activity through the strait would catapult prices, possibly into three-digit territory.
In the gas markets, Dutch and British wholesale front-month gas prices fell more than 10% on Tuesday morning on news of the ceasefire news, removing the risk premium the market had priced in for potential oil and gas supply disruptions.
The benchmark Dutch front-month contract at the TTF hub fell by €4.61 to €36.63 per megawatt hour (MWh).
The contract is trading at its lowest level since June 12, the day before the first Israeli strikes on Iran.
Tuesday's drop is all down to the news Israel agreed to US president Donald Trump's proposal for a ceasefire with Iran, a trader said.
"At the open today we have seen an incredible sigh of relief, with more than 10% being eroded from the price levels," consultancy Auxilione wrote on its daily market report.
Still, any breach to the ceasefire by any party would likely immediately inject concerns back into the market, they cautioned.
Israel has said Iran has already violated the ceasefire and that it would respond.
Gas prices had been trading at 11-week highs before over concerns the hostilities could lead to a closure of the Strait of Hormuz, locking in around 20% of global liquefied natural gas (LNG) supply.
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