Oil Prices Edge Higher as Middle East Peace Relapsed
Oil prices edged higher in the global commodities market on Monday as Middle East peace relapsed after ceasefire violations. With the geopolitical tensions, supply risks heightened amidst a negative demand outlook.
Over the weekend, Syria ended the 50-year rule of deposed president Bashar al-Assad. Israel has continued assaulting Lebanon despite the ceasefire agreement.
At the Dec meeting, the Organisation of Petroleum Exporting Countries and allies producers (OPEC+) agreed to extend the output cut till next year in a bid to keep price level settled.
The World Bank had predicted a global glut for 2025, and extended the excess supply projection till 2026. On the demand side, U.S and China are expected to curtail imports due to weak economic numbers from the two leading world’s crude oil consumers.
Brent rose to $71.57 per barrel on Monday. The US benchmark West Texas Intermediate increased to $67.65 per barrel.
On Sunday, 61 years of Baath Party rule in Syria collapsed after the capital Damascus fell out of the hands of regime control. Deposed President Bashar al-Assad, fled to Russia, where he was offered asylum.
However, the Israeli army early Sunday deployed additional forces along the buffer zone separating Syria and the occupied Golan Heights, citing concerns about the potential infiltration of armed groups into the region.
The developments in Syria have introduced uncertainty in the Middle East, lending some support to the oil market.
Moreover, Israel’s genocidal war continues unabated against Palestinians in the Gaza Strip, despite calls by the international community to halt attacks. The Israeli army also continued to strike Lebanon, undeterred by a cease-fire agreement that came into effect on Nov. 27.
However, Saudi Arabia’s price cuts and the decision by the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to extend production cuts limited further price increases, highlighting demand concerns, especially from China.
Saudi Arabian oil company Aramco on Sunday cut its official prices for Asian customers to the lowest level since early 2021. On Dec. 5, with the prospects of a slowdown in global demand and rising supply in non-OPEC+ producers, OPEC+ group pushed back the start of oil output increases by three months until April and extended the full unwinding of production cuts by a year until September 2026. Interbank Rates Slow as Remita, FAAC Credits Boost Liquidity
