Oil Prices Spike on Israel-Hezbollah Ceasefire Concerns

29 Nov 2024 , 12:26 PM

Friday saw a small increase in oil prices due to a possible resumption of supply risk as Hezbollah and Israel exchanged charges of truce violations and investors awaited an output policy decision from OPEC+ due to a postponed meeting.

Brent crude futures were up 10 cents, or 0.1%, to $73.38 a barrel. In comparison to Wednesday’s closing price, U.S. West Texas Intermediate crude futures were up 45 cents, or 0.7%, at $69.17.

The U.S. WTI benchmark was trading 2.9% lower on a weekly basis, while Brent futures were down 2.4%. The Thanksgiving holiday, which closed U.S. financial markets on Thursday, kept trading light.

Hezbollah, an armed group in Lebanon, and Israel exchanged accusations Thursday over purported breaches of their truce, which went into force the previous day. Initially, the agreement seemed to mitigate the risk of supply disruption caused by a wider conflict, which had caused an oil risk premium.

However, Israel’s concurrent wars with Hamas in Gaza and Hezbollah in Lebanon have had little impact on Middle Eastern oil supply.

To avoid a schedule clash, the Organisation of the Petroleum Exporting Countries (OPEC+) and its allies, notably Russia, postponed their next policy meeting from December 1 to December 5. At the meeting, OPEC+ is anticipated to further prolong its output cuts.

For feedback and suggestions, write to us at [e-mail]