Global oil prices declined following reports that the ceasefire agreement between Israel and Lebanon had strengthened. Investors interpreted the development as a sign of renewed diplomatic momentum toward resolving the broader conflict involving the United States, Israel, and Iran.

As of 12:15 a.m. GMT on Wednesday, Brent crude futures dropped by 67 cents, or 0.69 percent, to trade at 97.14 dollars per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures fell by 62 cents, or 0.65 percent, to 95.40 dollars per barrel. The decline reflected market optimism about reduced geopolitical risks in the Middle East.

The ceasefire understanding was reached after talks in Washington mediated by the United States. Both Israel and Lebanon agreed to implement the truce, though they emphasized that Hezbollah must completely halt its attacks for the agreement to hold.