(Bloomberg) -- Oil edged lower after an earlier equities rally stalled, with a potential cease-fire in Gaza and mounting concern about the global demand outlook providing bearish headwinds for crude.
West Texas Intermediate’s more-active October contract settled near $73 a barrel, posting its fifth loss in the last six sessions. Global equity markets dropped after briefly rising for a ninth consecutive session, in what would have been the S&P 500’s longest winning streak since 2004.
On Monday, US Secretary of State Antony Blinken said that Israel accepted a cease-fire proposal and that the next step was for Hamas to agree. In response, the militant group pushed back against the US, denying claims that it was stalling negotiations and saying it was “keen” to reach an accord.
Meanwhile, China’s worsening economic malaise is keeping the market subdued. Recent data showed shrinking factory activity and a decline in oil demand, while the world’s largest importer is also considering a new rescue plan for its beleaguered property sector.
Oil has surrendered most of its year-to-date gains as the lift from OPEC+ supply curbs and expectations for lower US interest rates have been countered by China’s challenging outlook. The Organization of the Petroleum Exporting Countries and its allies plan to restore some barrels next quarter, though that could change if prices keep falling, and balances for next year look oversupplied.
Crude’s recent bearish momentum has trickled into various aspects of paper markets, with options signaling traders are now anticipating a lower risk of futures spiking. Brent option skews have returned to their usual bias toward puts — which profit from lower prices — for the first time in two weeks.
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