Rudolph Angler Oil prices increased nearly 1% Thursday after Israel reported ceasefire violations with Hezbollah, fueling fears of instability in the Middle East.
Israeli military spokesperson Avichay Adraee stated on social media platform X that “several suspects were observed arriving, some in vehicles, to areas in southern Lebanon, breaching the agreement.”
Brent crude recovered from a two-day slump, reaching $72.90 a barrel in midday European trading. The euro slipped 0.2%, and European stocks pared earlier gains following the announcement.
The ceasefire, which began Wednesday, aimed to halt 14 months of conflict along the Israel-Lebanon border. However, renewed hostilities are raising fresh concerns about supply disruptions and regional stability.
Residents along the border have been advised against returning to the area due to safety concerns, underscoring the fragility of the truce.
OPEC+ Meeting Delayed as Analysts Highlight Stronger Cohesion
OPEC+ postponed its meeting on oil production policy to December 5, 2024, delaying the original date of December 1, 2024. The rescheduling accommodates the 45th Gulf Summit in Kuwait, which many ministers will attend.
Analysts predict the meeting will focus on production cuts and their potential extension into 2024, as persistently low prices have delayed previous plans to increase output. Some experts speculate cuts could extend longer-term due to sluggish market responses.
Goldman Sachs analyst Daan Struyven highlighted rising compliance among OPEC+ members with production cuts, signaling stronger cohesion within the alliance. “Any ramp-up in production will be gradual and data-driven,” Struyven said.
The bank forecasts Brent crude will average $76 per barrel in 2025, peaking at $78 in June. Production increases are expected to begin in April 2025, later than the previously predicted January start.
Market Dynamics and Future Outlook
US Energy Information Administration data shows crude oil and gasoline inventories at five-year lows, intensifying short-term supply concerns.
Goldman Sachs expects Brent crude prices to reach the mid-$80s in the first half of 2025 if stricter sanctions reduce Iran’s supply by 1 million barrels per day.
The bank also predicts oil demand will grow for at least another decade, driven by emerging markets and the slow pace of decarbonization in aviation and petrochemical production.
While geopolitical tensions and OPEC+ decisions shape short-term trends, structural challenges like the global energy transition suggest sustained demand for oil in the long term. Investors are closely monitoring developments in the Middle East and OPEC+ policies for their impact on market dynamics through 2025.