Breaking News: Oil Prices Unchanged Amidst Middle East Ceasefire Talks and Russia-Ukraine Tensions
Oil prices showed little movement in early Asian trade on Monday, stabilizing after significant gains last week. Reports of Israel nearing a ceasefire with Lebanon’s Hezbollah group were being digested by traders, potentially reducing the risk premium for oil. However, prices remained near recent two-week highs due to escalating tensions between Russia and Ukraine.
Brent crude futures for January delivery dipped slightly to $75.14 a barrel, while WTI crude inched lower to $70.75 a barrel by 19:47 ET (00:47 GMT).
Israel Close to Ceasefire with Hezbollah
According to Axios, Israel and Hezbollah were on the verge of signing a ceasefire agreement to end hostilities in Lebanon. Israeli officials are considering a draft agreement that includes a 60-day transition period for the withdrawal of Israeli military forces from southern Lebanon and the relocation of Hezbollah’s heavy weapons north of the Litani River. The deal, brokered by U.S. officials, would also establish a U.S.-led oversight committee.
The potential ceasefire between Israel and Hezbollah could reduce tensions in the Middle East, leading to a decrease in the risk premium for oil. However, reports of the ceasefire were overshadowed by Hezbollah launching rockets near Tel Aviv following a large Israeli strike on Beirut over the weekend. Tensions in the region were further exacerbated by Iran announcing an increase in its nuclear fuel-making capacity.
Oil Reaches Two-Week High Amid Russia-Ukraine Tensions
Oil prices remained close to their highest levels in over two weeks, driven by escalating tensions between Russia and Ukraine. Ukraine’s use of Western-made, long-range missiles to target locations deep within Russia provoked a response from Moscow, which lowered its threshold for nuclear retaliation and conducted a strike on Ukraine with an experimental hypersonic missile.
ANZ analysts expressed concerns about potential disruptions to oil supplies as the conflict between Russia and Ukraine entered a new and dangerous phase.
