Oil steadies as markets eye Israel-Hezbollah ceasefire, OPEC+ meeting
Shafaq News/Oil prices steadied on Wednesday, with markets assessing the potential impactof a ceasefire deal between Israel and Hezbollah, and ahead of Sunday's OPEC+meeting of producers.
Brent crudefutures rose 5 cents to $72.86 a barrel by 0415 GMT, while U.S. West TexasIntermediate crude futures were up 3 cents at $68.80 a barrel.
Bothbenchmarks settled lower on Tuesday after Israel agreed to a ceasefire dealwith Lebanon's Hezbollah.
A ceasefirebetween Israel and Hezbollah will take effect on Wednesday after both sidesaccepted an agreement brokered by the United States and France, U.S. PresidentJoe Biden said on Tuesday.
The accordcleared the way for an end to a conflict across the Israeli-Lebanese borderthat has killed thousands of people since it was ignited by the Gaza war lastyear.
IsraeliPrime Minister Benjamin Netanyahu said he was ready to implement the deal withLebanon and would "respond forcefully to any violation" by Hezbollah.
"Marketparticipants are assessing whether the ceasefire will be observed," saidHiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
"Weexpect WTI to trade within the range of $65-$70 a barrel, factoring in weatherconditions during the Northern Hemisphere's winter, a potential increase inshale oil and gas production under the incoming Donald Trump administration inthe U.S., and demand trends in China," he said.
On theOrganization of the Petroleum Exporting Countries and allies led by Russia, orOPEC+, sources said the group is discussing a further delay to a planned oiloutput hike that was due to start in January, ahead of a Dec. 1 meeting todecide policy for early 2025.
The grouppumps about half the world's oil and had planned to gradually roll backoil-production cuts with small increases over many months in 2024 and 2025. Buta slowdown in Chinese and global demand, and rising output outside the group,have put a dampener on that plan.
"Ourlongstanding base case has been that OPEC+ defers the tapering of output cutsall the way through 2025," Citi Research analysts said in a note, addingthat the tapering could start in April instead of January.
"Fromthe producer group's point of view, holding off the unwind could allow themarket the chance to be more balanced, via supply disruptions or more resilientdemand, while bringing barrels back makes lower prices a foregoneconclusion."
In the U.S.,President-elect Donald Trump said he would impose a 25% tariff on all productscoming into the U.S. from Mexico and Canada. Crude oil would not be exempt fromthe trade penalties, sources told Reuters on Tuesday.
Meanwhile,U.S. crude oil stocks fell while fuel inventories rose last week, marketsources said, citing API figures on Tuesday.
Crude stocksfell by 5.94 million barrels in the week ended Nov. 22, exceeding analysts'forecast of a drop of about 600,000 barrels.
(REUTERS)
