Oil Prices Fall Amid Reports of Israel-Lebanon Ceasefire Deal
Oil prices fell more than $2 on Monday as reports emerged that Israel and Lebanon had agreed to the terms of a deal to end the Israel-Hizbollah conflict. According to unnamed senior US officials, the deal would bring an end to the conflict, leading to a drop in oil prices.
Crude Oil Prices Plummet
Brent crude futures were down $2.02, or 2.69%, at $73.15 a barrel by 9:57 am CST (15:57 GMT), while US West Texas Intermediate crude futures were down $2.08, or 2.92%, at $69.16 a barrel.
Dealmakers Express Caution
Israel said on Monday that it is moving towards a ceasefire in the war with Hizbollah, but there are still issues to address. Lebanese officials, on the other hand, voiced guarded optimism, but expressed skepticism about Israeli Prime Minister Benjamin Netanyahu’s commitment to the deal.
Analysts Weigh In
“It seems the news of a ceasefire between Israel and Lebanon is behind the price drop, though no supply has been disrupted due to the conflict between the two countries, and the risk premium in oil has been low already before the latest price decline,” said Giovanni Staunovo of UBS.
Oil markets are being pushed up and pulled down on rising or falling supply disruption fears, said Phil Flynn, senior analyst at Price Futures Group. “A report that Israel’s Prime Minister Netanyahu approves Lebanon ceasefire deal in principle could be a bearish catalyst, yet we must see more details as they become available.”
Context and Background
Oil prices have been volatile in recent weeks, with Brent and US WTI contracts last week notching their biggest weekly gains since late September to reach their highest settlement levels since November 7, following Russia’s launch of supersonic missiles at Ukraine.
Conclusion
The drop in oil prices is a result of the reports of a ceasefire between Israel and Lebanon, as well as the low risk premium in oil. While some analysts are cautious about the deal, others believe that the news could lead to a further decline in oil prices.
FAQs
Q: What happened to oil prices?
A: Oil prices fell more than $2 on Monday due to reports of a ceasefire between Israel and Lebanon.
Q: Why did oil prices drop?
A: The drop in oil prices is attributed to the low risk premium in oil and the news of a ceasefire between Israel and Lebanon.
Q: What did Israel say about the ceasefire?
A: Israel said it is moving towards a ceasefire in the war with Hizbollah, but there are still issues to address.
Q: What did Lebanese officials say about the deal?
A: Lebanese officials voiced guarded optimism, but expressed skepticism about Israeli Prime Minister Benjamin Netanyahu’s commitment to the deal.
