Oil prices fell in early trading on Thursday after Israel and Hamas agreed on the first phase of a plan to end the war in Gaza, impacting the war risk premium on oil and prompting investors to sell.

Brent crude futures dropped 51 cents, or 0.77%, to $65.74 a barrel by 00:02 GMT. U.S. West Texas Intermediate crude fell 55 cents, or 0.88%, to $62.

U.S. President Donald Trump said that Israel and Hamas reached a long-awaited ceasefire agreement in Gaza and the release of hostages as part of a plan to end the two-year war in the Palestinian territory.

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

The war in Gaza had supported oil prices as investors considered potential risks to global oil supplies if the conflict expanded into a wider regional war.

Prices rose about 1% on Wednesday to their highest levels in a week after investors assessed that the failure to make progress on a peace deal for Ukraine would keep sanctions on Russia in place.