“Oil prices rose in early trade on Tuesday, November 26, after falling in the previous session, as investors priced in a potential ceasefire between Israel and Hezbollah, which weighed on oil’s risk premium.”, — write: epravda.com.ua
Oil prices rose in early trade on Tuesday, November 26, after falling in the previous session, as investors priced in a potential cease-fire between Israel and Hezbollah, weighing on oil’s risk premium. This is reported by Reuters. Brent crude futures were up 29 cents, or 0.4%, at $73.2 a barrel, while U.S. West Texas Intermediate crude futures were at $69.2 a barrel, up 26 cents, or 0.38% more than the previous ones. Both were down $2 a barrel on Monday after reports of an end to the conflict between Lebanon and Israel, sending crude oil selling off.Advertisement: Market reaction to news of the ceasefire was “overdone,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. Advertisement: While the news calmed fears of supply disruptions in the Middle East, the conflict with by Israel and Hamas this year “never really led to significant disruptions in supply to drive premiums to war,” Sachdeva said. A ceasefire in Lebanon will make it less likely that the new US administration will impose tough sanctions on Iranian crude, ANZ analysts said. If President-elect Donald Trump’s administration returns to a campaign of maximum pressure on Tehran, Iranian exports could drop by 1 million barrels per day, analysts say, reducing global crude flows. On Tuesday, the capital of Ukraine, Kyiv, was subjected to a prolonged attack by Russian drones, Mayor Vitaliy Klitschko said. The feud between major oil producer Russia and Ukraine intensified this month after US President Joe Biden authorized Ukraine to use US-made weapons to launch deep strikes against Russia. In addition, OPEC+ may consider leaving the current cut in oil output from Jan. 1 at its next meeting on Sunday, Azerbaijan’s Energy Minister Parviz Shahbazov told Reuters, as the producer group has already postponed a hike due to demand concerns. On Monday, Trump said he would sign an executive order imposing a 25% tariff on all products entering the US from Mexico and Canada. It is unclear whether this will include crude oil. The vast majority of the 4 million barrels of oil exported by Canada goes to the US. Analysts say Trump is unlikely to impose tariffs on Canadian oil, which cannot be easily substituted because it differs from US-produced grades. “Trump’s policies are only a blueprint so far… What is actually happening on that front is not yet known,” said Philip Nova’s Sachdeva. At the moment, markets are eyeing Trump’s plan to boost U.S. oil production, which has been close to record levels for 2022-2024 and has absorbed supply disruptions from geopolitical crises and sanctions, Sachdeva said. To remind: Oil prices fell by more than $1 on Monday after Axios reported that Israel and Lebanon reached an agreement to end the conflict between Israel and Hezbollah.
