Oil rates rise as investors assess impact of possible Israel-Hezbollah ceasefire
Date
11/26/2024 2:21:20 AM
(MENAFN) Oil prices rose slightly in early trading on Tuesday after a drop in the previous session, as investors assessed the potential impact of a possible ceasefire between Israel and Hezbollah. The news of the ceasefire led to a decrease in the risk premium in the oil market, though concerns remained about broader geopolitical instability.
Brent crude futures increased by 29 cents, or 0.4 percent, reaching USD73.20 per barrel by 0430 GMT. Similarly, U.S. West Texas Intermediate (WTI) crude futures gained 26 cents, or 0.38 percent, rising to USD69.20. These small increases came after a significant decline in prices on Monday, where crude oil settled USD2 lower per barrel after reports of an imminent ceasefire between Hezbollah and Israel.
Market analysts noted that the market's reaction to the ceasefire news was "overblown." Priyanka Sachdeva, a market analyst at Philip Nova, emphasized that while the ceasefire news eased fears of disruptions to Middle East oil supplies, the ongoing Israel-Hamas conflict had not significantly impacted oil supplies in recent months to warrant a drastic change in prices.
Analysts from ANZ pointed out that the ceasefire in Lebanon also reduced the likelihood of the incoming U.S. administration imposing tough sanctions on Iranian crude oil. They noted that if the U.S. were to ramp up pressure on Iran again, Iranian oil exports could drop by up to 1 million barrels per day, which would further reduce global crude flows. Meanwhile, in Europe, Kyiv, the capital of Ukraine, was attacked by Russian drones early on Tuesday, as reported by the city's mayor, Vitali Klitschko.
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