Oil prices are on track for a weekly decline on Friday amid the cease-fire agreement reached between Israel and Lebanon, the International Energy Agency’s (IEA) report highlighting an increase in global oil production, and US President-elect Donald Trump’s statement that he will increase tariffs.
The International benchmark Brent crude traded at $72.19 per barrel at 2.37 p.m. local time (1137GMT) on Friday, down by around 0.6% relative to the closing price of $72.65 a barrel last week.
West Texas Intermediate (WTI), the American benchmark, traded at $68.30 a barrel at the same time on Friday, a decrease of about 0.8% from last Friday’s session, which closed at $68.88 per barrel.
Oil prices fell as expectations grew that the Israeli government’s approval of a cease-fire deal with Lebanon, designed to end more than 14 months of conflict with Hezbollah since the start of the Gaza war, could lead to further regional de-escalation.
Experts predicted that the cease-fire agreement that came into force on early Wednesday could pressure Israel to end its attack on Gaza.
The prospect of a lasting cease-fire in the wider region, home to a substantial share of the world’s oil reserves, has helped drive price declines by easing supply concerns among market participants.
Meanwhile according to data released by the Energy Information Administration (EIA) late Wednesday indicated a rise in US crude oil production supporting the downward movement of prices.
EIA data showed that US crude oil production increased by 295,000 barrels per day (bpd) to about 13.9 million bpd during the week ending Nov. 22. The rise in the stocks of the world’s largest oil consuming country put downward pressure on prices.
Moreover, US President-elect Donald Trump’s statement that he will increase tariffs lead to fears that it could disrupt Federal Reserve’s fight against inflation.
However, despite the high tariffs planned by the newly elected US President Donald Trump, news reports claim that China might prefer to negotiate instead of escalating tensions. This limited further price falls.
