Oil was steady as signs OPEC+ will once again delay restoring some output countered easing geopolitical risk after a cease-fire agreement between Israel and Hezbollah.
West Texas Intermediate traded below $69 a barrel, after losing more than 3% in the previous two sessions on anticipation of a truce, while Brent crude closed near $73. OPEC+ meets this weekend, and is likely to delay an increase to production that was planned for January for several months on signs of a glut, according to delegates.
Israel reached a deal for a 60-day cease-fire with the Lebanese militant group Hezbollah after weeks of talks mediated by the US. However, shortly after President Joe Biden announced the accord, both sides pressed ahead with attacks, highlighting the difficulties in securing a longer-term agreement.
Crude has been caught in a tight range since the beginning of last month, buffeted by competing bullish and bearish signals. There’s a number of catalysts that may drive the market’s next move — including the policies of a second Trump presidency and geopolitical risks linked to Russian and Iranian supplies next year.
“We’re pretty fairly priced” with Brent between $70 and $75 a barrel, said Robert Rennie, head of commodity and carbon research at Westpac Banking Corp.“It’s pretty much a done deal that OPEC+ will agree to roll over the current production cuts through the first quarter.”
The American Petroleum Institute reported US crude inventories shrank by 5.9 million barrels last week, which would be the biggest drop since August if confirmed by government figures later Wednesday.
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