Oil extended losses on Friday after falling more than 1 percent in the previous session amid cooling tensions in the Middle East.
Benchmark Brent crude futures dipped 0.4 percent to $64.96 a barrel in European trade, while WTI crude futures were down 0.4 percent at $61.28.
The oil market's risk premium faded as Israel's government ratified a ceasefire agreement with the Palestinian militant group Hamas overnight, clearing the way to suspend hostilities in Gaza within 24 hours.
Once Israel has withdrawn, Hamas will have 72 hours to release all Israeli hostages as Israel releases Palestinian detainees.
Hamas's exiled Gaza leader, Khalil al Hayya, has issued a statement following the signing of the ceasefire deal.
"We have reached an agreement to end the war against our people," he said.Analysts said the peace process in the Middle East will help ease fears about crude carriers passing through the Suez Canal and the Red Sea.
Elsewhere, Russia carried out a large-scale attack on Ukraine's capital Kyiv, in the wee hours of Friday, plunging the city into darkness.
Ukraine's Energy Minister Svitlana Grynchuk confirmed the attack and said Russian forces were striking energy sites in the country and crews were working to reduce the effect of the strikes.
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Market Analysis
December 26, 2025 08:42 ET Third quarter economic growth data from some major economies including the U.S. were the main news in this holiday shortened week. GDP growth and industrial production data from the U.S. helped to boost morale, while the consumer confidence survey results were less upbeat. In Europe, the quarterly economic growth data from the U.K. drew attention, while the minutes of the Australian central bank’s latest policy session was in focus in Asia.