Traders Ignore Ceasefire Violations As Oil Incurs More Daily, Weekly Losses

by Ship & Bunker News Team
Friday November 29, 2024

Diminishing concern of supply risks – which was driven by the assumption the Middle East ceasefire would endure – was said to have driven oil trading for the bulk of the week and on Friday was credited for another daily as well as weekly drop in prices.

Brent settled down 34 cents at $72.94 per barrel, while West Texas Intermediate settled down 72 cents at $68; for the week, Brent declined 3.1 percent and WTI lost 4.8 percent.

Despite the trust investors exhibited in the ceasefire that took effect Wednesday, accusations of violations by Israel and Hezbollah have arisen since then, and on Friday Lebanon media reported that four Israeli tanks entered a Lebanese border village, causing rising tensions.

Another factor influencing trading was the Organization of the Petroleum Exporting Countries (OPEC) delaying its next policy meeting to Dec. 5 from Dec. 1, when it is expected to decide on a further extension to output cuts.

This caused Ole Hansen, analyst at Saxo Bank, to observe that "the group has to consider the risk of further price weakness amid the release of currently unwanted barrels, not least because expectations for robust production from non-OPEC+ producers next year could lead to a crude surplus."

Yet another persistent factor driving trading was observed by Bloomberg, which stated, "Prices have been buffeted by…..concerns that president-elect Donald Trump's upcoming policies may affect supply from Russia and Iran."

As for Trump's tariff threats against Canada, Goldman Sachs joined other analytical organizations in doubting the threats were anything but a bargaining tool, "On the premise that the Trump administration is focused on reducing energy costs" – and a 25 percent levy, if imposed, would have significant ramifications for trade flows.

In other oil news on Friday sure to worry bearish traders, Libya's National Oil Corporation said  it reached a new production high by pumping 1.3 million barrels of crude and condensate daily (in addition to 203,017 barrels of gas equivalent); this brought the country's total production to 1.5 million barrels per day.