Oil Prices Rise on Lebanon Fears and OPEC+ Cuts

4 Dec 2024 , 11:03 AM

As markets braced for OPEC+ to declare an extension of production curbs this week, and as Israel threatened to attack the Lebanese state if its truce with Hezbollah fails, oil prices surged more than 2% on Tuesday.

Brent crude futures had their largest increases in the past two weeks, closing at $73.62 a barrel after increasing $1.79, or 2.5%. U.S. West Texas Intermediate oil futures closed at $69.94 per barrel, up $1.84, or 2.7%, the most since Nov. 18.

Israeli soldiers have persisted in attacking what they claim are Hezbollah fighters in Lebanon, disregarding the ceasefire accord reached last week. Leading Lebanese leaders have called on Paris and Washington to put pressure on Israel to maintain the ceasefire.

Although there have been no interruptions in the oil supply due to the violence in Lebanon, Staunovo said merchants will be closely monitoring tensions between Israel and Iran in the upcoming months.

At Thursday’s OPEC+ meeting, the Organisation of the Petroleum Exporting Countries and its partners are expected to extend supply restrictions, which will also help oil prices.

Four OPEC+ sources told Reuters that the organisation is likely to continue its production cutbacks through the end of the first quarter of next year.

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