Oil prices steadied on Wednesday as markets assessed the potential impact of a ceasefire agreement between Israel and Hezbollah and ahead of an OPEC+ producer meeting on Sunday.
Brent crude futures rose 5 cents to $72.86 a barrel by 0415 GMT, while WTI crude futures rose 3 cents to $68.80 a barrel.
Both indices closed lower on Tuesday after Israel signed a ceasefire deal with Lebanon’s Hezbollah.
Biden said on Tuesday that a ceasefire between Israel and Hezbollah would take effect on Wednesday after both sides agreed to a deal brokered by the United States and France.
The deal paves the way for an end to the Hezbollah-dominated conflict on the Israel-Lebanon border that began last year’s Gaza war and has killed thousands.
Israeli Prime Minister Benjamin Netanyahu said he was ready to implement the deal with Lebanon but would respond forcefully to any violation by Hezbollah.
Market participants are assessing whether the ceasefire will be observed.
Given the northern hemisphere’s winter weather conditions, the potential for increased shale oil and gas production in the US under Donald Trump, and demand trends in China, WTI is expected to trade in the $65-$70 range.
OPEC+ members are discussing further delays to the oil production increase that was scheduled to begin in January before meeting on December 1 to set policy for the early 2025.
The group pumps about half of the world’s oil and planned to gradually roll back the cuts with small increases in 2024 and 2025. But slowing demand from China and the world, and rising production outside the group, have undermined that plan.
The long-standing scenario was for OPEC+ to ease production cuts and postpone them until 2025, but the reduction is expected to begin in April rather than January.
From the producer group’s perspective, the postponement could give the market a chance to be more balanced, either through supply cuts or more resilient demand, while increasing production would make lower prices inevitable.
In the US, President-elect Donald Trump said he would impose 25% tariffs on all goods coming into the US from Mexico and Canada. Crude oil will not be exempt, the sources said.
Meanwhile, market sources said on Tuesday that US crude inventories fell while fuel inventories rose, citing API figures. Crude inventories fell by 5.94 million barrels in the week ended November 22, beating analysts’ estimates of a decline of around 600,000 barrels.
