Oil rises despite eased geopolitical risk premium

Oil drilling rigs

Oil prices rose today, Nov. 26 after Monday's decline, driven by reports of a potential US-French announcement of a ceasefire between Israel and Hezbollah in Lebanon.

Brent crude futures for January delivery increased by 0.40% or 29 cents to $73.30 a barrel as of 9:08 am KSA time, following a 2.85% loss or $2.16 drop in Monday's session.

WTI crude futures for January delivery also climbed, rising by 0.36% or 25 cents to $69.19 a barrel.

Reuters reported on Monday, citing informed sources, that US President Joe Biden and French President Emmanuel Macron are expected to announce a ceasefire between Israel and Hezbollah in the near future.

John Kirby, White House National Security Council Spokesperson, told Reuters that an agreement is imminent, but no action will be taken until all arrangements are finalized.

These reports have reduced the geopolitical risk premium in the oil market and eased concerns about supply disruptions from the Middle East.

Regarding the ongoing war in Gaza, Priyanka Sachdeva, Senior Market Analyst at Phillip Nova, told Reuters that it has not significantly impacted oil supply in the region or the geopolitical risk premium.