Oil prices steady amid Israel-Lebanon tensions, US stocks build by Investing.com
Investing.com– Oil prices fell in Asian trade on Wednesday after rising sharply in the previous session as Israel threatened to attack Lebanon if its ceasefire with Hezbollah collapses.
But oil’s momentum was halted by industry data showing an unexpected increase in US oil inventories. Sentiment also remained tense ahead of the OPEC+ meeting on Thursday, where the cartel is expected to continue delaying plans to increase production.
Still, oil has maintained a risk premium as Israel and Hezbollah have repeatedly violated the recently announced ceasefire agreement. Tensions between Russia and Ukraine also kept traders on edge.
Crude oil for February delivery was down 0.1% at $73.58 a barrel, while it was down 0.1% at $69.50 a barrel at 20:51 ET (01:51 GMT). Both contracts rose 2% on Tuesday.
Israel-Lebanon tensions have centered on ceasefire violations
Oil has been fueled by tensions in the Middle East after Israel threatened to attack Lebanon if it failed to end its war with Hezbollah.
The threat came as Israel and Hezbollah both began attacking each other despite agreeing to a US-brokered ceasefire last week.
Israel’s Defense Minister Israel Katz has threatened to blame Lebanon for not disarming Hezbollah.
The latest strikes and talks suggest that last week’s freeze may not last, raising the prospect of tensions in the Middle East and keeping the oil risk in play.
The US list of names is growing more than expected- API
Data from US oil inventories showed they grew 1.2 million barrels (mb) in the week to November 29, compared to expectations for a 2.1 mb draw.
The reading raises concerns that demand in the world’s largest oil market is slowing, especially with the arrival of the winter season.
API data usually announces similar readings from , which should be expected later on Wednesday. Any signs of US asset growth point to less robust conditions.
The OPEC+ meeting is awaited for signs of supply
The focus on the market was also on the meeting of the Organization of the Petroleum Exporting Countries (OPEC+) on Thursday, where the company is expected to delay plans to increase production.
OPEC+ has gradually cut its outlook for oil demand in 2024 and 2025, citing concerns about slowing growth in top consumer China.
Any extension of OPEC’s ongoing supply cuts is likely to increase oil prices through 2025 by tightening markets.
