Oil prices edge higher in early trade amid ceasefire hopes

Oil prices rose slightly in early trade on Tuesday after a sharp drop in the previous session, as investors assessed the potential impact of a ceasefire between Israel and Hezbollah.

Brent crude futures increased by 15 cents, or 0.21 per cent, to $73.16 a barrel, while US West Texas Intermediate crude futures rose by 15 cents, or 0.22 per cent, to $69.09 a barrel.

Both benchmarks had settled down $2 a barrel on Monday following reports that Lebanon and Israel had agreed to terms to end the Israel-Hezbollah conflict, triggering a crude oil selloff.

The ceasefire eased concerns about Middle Eastern supply disruptions, but analysts noted that the conflict had not significantly impacted oil supplies this year. Iran, an OPEC member, could face reduced sanctions risks if the ceasefire holds.

Geopolitical tensions remain high with ongoing Russia-Ukraine hostilities and potential changes to US trade tariffs under President-elect Donald Trump.

Markets are also watching OPEC+, which may maintain current production cuts into 2024 amid demand concerns.

Attribution: Reuters

Subediting: M. S. Salama