Nov 26 2024: Oil prices saw modest gains in early Tuesday trading following a sharp drop in the previous session, as markets evaluated the potential for a ceasefire between Israel and Hezbollah, which has eased geopolitical risks in the Middle East.
By 0705 GMT, Brent crude futures rose by 15 cents, or 0.21%, to $73.16 a barrel, while U.S. West Texas Intermediate crude increased by 15 cents, or 0.22%, to $69.09 a barrel. This follows a $2 decline on Monday, driven by reports of an agreement to end the Israel-Hezbollah conflict.
Market analyst Priyanka Sachdeva from Phillip Nova suggested that the reaction to the ceasefire news was exaggerated, noting that the Israel-Hamas conflict had minimal impact on supply this year. However, weakening global demand for oil could result in a volatile market moving forward.
Analysts also noted that reduced tensions in Lebanon could decrease the likelihood of stringent U.S. sanctions on Iran, a key OPEC member producing 3.2 million barrels per day. If President-elect Donald Trump reinstates maximum-pressure policies on Tehran, Iran’s exports could fall by 1 million barrels per day, tightening global oil supply.
Meanwhile, tensions in Ukraine escalated with a drone attack on Kyiv, and OPEC+ is considering maintaining current output cuts in its upcoming meeting. Additionally, Trump’s plans to impose tariffs on imports from Mexico, Canada, and China, coupled with his focus on boosting U.S. oil production, remain key factors influencing market sentiment.
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