HOUSTON: Oil prices fell more $1 on Monday after Axios reported that Israel and Lebanon had agreed to the terms of a deal to end the Israel-Hezbollah conflict, citing an unnamed senior US official. Brent crude futures were down $1.34, or 1.78%, at $73.83 a barrel by 9 a.m. CST (1500 GMT), while US West Texas Intermediate crude futures were down $1.44, or 2.02%, at $69.80 a barrel. Israel said on Monday that it is moving toward a ceasefire in the war with Hezbollah but there are still issues to address, while Lebanese officials voiced guarded optimism but said Israeli Prime Minister Benjamin Netanyahu was not to be trusted.
“It seems the news of a ceasefire between Israel and Lebanon is behind the price drop, though no supply has been disrupted due to the conflict between the two countries and the risk premium in oil has been low already before the latest price decline,” said Giovanni Staunovo of UBS.
Geopolitical risk of supply disruptions from either Iran or Russia drove up crude oil prices last week. Both Brent and US WTI contracts last week notched their biggest weekly gains since late September to reach their highest settlement levels since Nov. 7 after Russia fired a hypersonic missile at Ukraine in a warning to the United States and the UK following strikes by Kyiv on Russia using US and British weapons.
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