Oil on track for weekly loss despite renewed geopolitical risks in Middle East

Oil drilling rigs

Brent crude prices remained stable on Friday, while US crude edged higher following mutual accusations between Israel and Lebanon's Hezbollah of violating the ceasefire agreement just two days after its implementation.

Brent crude for January delivery stabilized at $73.30 a barrel as of 09:29 am KSA time. Meanwhile, US WTI crude futures for January delivery rose 0.54%, or 37 cents, to $69.09 per barrel.

On Nov. 28, Israel and Hezbollah exchanged accusations of breaching the ceasefire brokered on Wednesday under US and French mediation. This development renewed fears of a potential conflict in southern Lebanon and raised concerns about disruptions to Middle Eastern oil supplies.

The announcement of the ceasefire had previously reduced the geopolitical risk premium in oil markets. However, Brent crude is on track for a weekly loss of 2.4%, while US crude remains down by 2.9% for the week, despite Friday's gains.

Separately, sources familiar with the matter told Reuters that the OPEC+ alliance is discussing delaying the rollback of voluntary production cuts initially planned for the first quarter of 2025. This plan was set to take effect in January.

The sources indicated that member countries are set to hold further talks on the matter, as well as other options, ahead of the group's next meeting scheduled for Dec. 5.