Oil prices rose by nearly 1% on Thursday, fueled by renewed Middle East tensions after Israel reported breaches of its ceasefire with Hezbollah.
Brent crude advanced to $72.90 a barrel during midday European trading, recovering from a recent two-day decline. The euro fell by 0.2%, and European stocks trimmed earlier gains following the developments.
The ceasefire, which had begun on Wednesday, aimed to end 14 months of conflict along the Israel-Lebanon border. However, reports of renewed hostilities raised concerns over supply stability. Israeli military spokesperson Avichay Adraee noted on social media X that “a number of suspects were observed arriving, some of them in vehicles, to several areas in southern Lebanon, which constitutes a breach of the agreement.” Residents in the border region have been advised not to return due to safety risks.
In related news, OPEC+ postponed its key meeting on oil production policy to December 5, 2024, shifting it from the originally scheduled December 1. The rescheduling came as several ministers planned to attend the 45th Gulf Summit in Kuwait. Analysts expect the meeting to focus on the extension of production cuts into 2024, amid persistently low oil prices that have led to delays. Some experts suggest that longer-term production caps could be on the horizon as the market has been slow to respond.
Goldman Sachs analyst Daan Struyven highlighted that OPEC+ is likely to take a measured approach. “Any ramp-up in OPEC+ production will be gradual and data-driven,” Struyven said, adding that compliance with production cuts is improving among members, signaling stronger cohesion within the cartel. This could indicate a shift toward sustained production limitations as a long-term strategy.
