Oil prices declined Thursday after Israel and Hamas reached an agreement on the first phase of a plan to end the Gaza war, which weakened crude oil's geopolitical risk premium and triggered investor selling.

The November-delivery West Texas Intermediate (WTI) crude contract on the New York Mercantile Exchange fell $1.04, or 1.66%, to settle at $61.51 per barrel.

Brent crude futures settled down $1.03, or 1.55%, at $65.22 per barrel.

President Trump announced that Israel and Hamas had reached a long-sought agreement on a Gaza ceasefire and prisoner release, with the plan aimed at ending the two-year conflict in the Palestinian enclave.

Israeli Prime Minister Netanyahu said he would convene his government on Thursday to approve the ceasefire agreement.

The Gaza war had previously supported oil prices as investors worried about potential risks to global oil supplies if the conflict escalated into a broader regional dispute.

Oil prices had risen about 1% on Wednesday to weekly highs as investors believed that stalled Ukraine peace processes would maintain sanctions against Russia.

Meanwhile, the U.S. Energy Information Administration reported Wednesday that total U.S. petroleum products supplied last week rose to 21.99 million barrels per day, the highest level since December 2022, serving as a proxy for U.S. oil consumption.