Oil prices slid by $2 a barrel on Monday after Israel and Lebanon reportedly agreed to the terms of a deal to end the Israel-Hezbollah conflict, a move that could ease some tensions in the hot Middle East region.
Brent crude futures settled at $73.01 a barrel, down $2.16, or 2.87 percent while the US West Texas Intermediate (WTI) crude futures finished at $68.94 a barrel, down $2.30 or 3.23 percent.
Reuters reported on Monday that a senior Israeli official said the country’s cabinet would meet on Tuesday to approve a ceasefire deal with Hezbollah.
It was also reported that a Lebanese official said the country had been told by the US that an accord could be announced “within hours”.
Market analysts noted that 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.
Earlier in the year, Israel had said that a deal to end the war was getting closer though some issues remained.
Prices rose last week after Russia fired a hypersonic missile at Ukraine in what appears to be a warning following strikes on Russia using US and British weapons.
Also, Russian President Vladimir Putin said on Friday that Russia would keep testing the hypersonic Oreshnik missile it fired at Ukraine with plans to start producing the weapon in large quantities.
Russia’s new weapon is an intermediate-range, nuclear-capable ballistic missile that had not been previously mentioned in public.
According to Mr Putin, air defences cannot intercept the Oreshnik, which attacks at a faster speed and can manoeuvre mid-flight, making them harder to track and intercept.
Meanwhile, the market will also be expecting outcomes from the Organisation of the Petroleum Exporting Countries and its allies, OPEC+, which is due to hold its ministerial meeting on Sunday, December 1.