Oil Prices Spike as Israel, Hezbollah Violate New Ceasefire Deal

By Adedapo Adesanya

Oil prices surged on Thursday after Israel and Lebanese armed group Hezbollah traded accusations that their ceasefire had been violated, and as Israel tanks fired on south Lebanon.

This pushed Brent crude futures higher by 30 cents or 0.4 per cent to $73.13 per barrel as the US West Texas Intermediate (WTI) crude futures increased by 23 cents 0.3 per cent to trade at $68.93 a barrel.

However, trading was thin because of the US Thanksgiving holiday.

The market had expected that the ceasefire would cool some risk but Israel’s military said the ceasefire was violated after what it called suspects, some in vehicles, arrived at several areas in the southern zone.

The deal, which took effect on Wednesday, was intended to allow people in both countries to start returning to homes in border areas after 14 months of fighting.

Meanwhile, the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) delayed a crucial meeting for a few days, which is likely to extend production cuts.

The group pushed its next policy meeting to Thursday, December 5 from December 1 to avoid a conflict with another event.

Members were discussing a further delay to a planned oil output hike that was due to start in January, to help prop up prices.

It will also be the last meeting that the 22-member group will hold before Donald Trump will assume office as the next US President in January.

There are expectations of potential risk to Iran’s supply from sanctions that might be implemented under the Trump administration.

The group pumps about half the world’s oil but has maintained production cuts to support prices. It hopes to unwind those cuts, but weak global demand has forced it to delay the start of gradual increases.

Slowing fuel demand growth in top consumers the US and China has weighed heavily on oil prices this year, although supply curtailments from OPEC+ have helped to limit the losses.

This was seen as US petrol stocks rose 3.3 million barrels in the week ended on November 22, the US Energy Information Administration (EIA) said on Wednesday.