By Adedapo Adesanya
Crude oil prices dropped 3 per cent a barrel on Monday after Israel and Lebanon reportedly agreed to the terms of a deal to end the Israel-Hezbollah conflict.
Brent crude futures settled at $73.01 a barrel, down $2.16 or 2.87 per cent and the US West Texas Intermediate (WTI) crude futures finished at $68.94 a barrel, down $2.30 or 3.23 per cent.
Reuters reported on Monday that a senior Israeli official said the country’s cabinet would meet on Tuesday to approve a ceasefire deal with Hezbollah.
The media also reported that a Lebanese official said the country had been told by the US that an accord could be announced “within hours”.
Market analysts noted that the news of a ceasefire between Israel and Lebanon is behind the price drop, though no supply has been disrupted due to the conflict between the two countries and the risk premium in oil has been low already before the latest price decline.
Earlier in the year, Israel had said that a deal to end the war was getting closer though some issues remained.
Prices rose last week after Russia fired a hypersonic missile at Ukraine in what appears to be a warning following strikes on Russia using US and British weapons.
Also, Russian President Vladimir Putin said on Friday that Russia would keep testing the hypersonic Oreshnik missile it fired at Ukraine with plans to start producing the weapon in large quantities.
Russia’s new weapon is an intermediate-range, nuclear-capable ballistic missile that had not been previously mentioned in public.
According to Mr Putin, air defences cannot intercept the Oreshnik, which attacks at a faster speed and can manoeuvre mid-flight, making them harder to track and intercept.
Meanwhile, the market will also be expecting outcomes from the Organisation of the Petroleum Exporting Countries and its allies, OPEC+, which is due to hold its ministerial meeting on Sunday, December 1.
One of its top members, Azerbaijan said the 22-member alliance may consider leaving its current oil output cuts in place from January 1, after it has postponed hikes this year amid demand worries.
Another one of its members, Kazakhstan, which overproduces its quota could sharply increase its crude oil exports out of Turkey’s port of Ceyhan.
According to Kazakhstan Energy Minister Almasadam Satkaliyev, exports via the Baku-Tbilisi-Ceyhan (BTC) pipeline could increase to 20 million metric tons a year from the current 1.5 million as the country increases oil production.
Dipo Olowookere 
Modupe Gbadeyanka