Oil rises as Israel-Hezbollah ceasefire violated, OPEC+ delays meeting

Oil prices climbed nearly 1% on Thursday morning, driven by escalating tensions in the Middle East after Israel reported violations of its ceasefire agreement with Hezbollah.

Israeli military's spokesperson Avichay Adraee wrote on social media X that "a number of suspects were observed arriving, some of them in vehicles, to several areas in southern Lebanon, which constitutes a breach of the agreement."

Brent crude rose to $72.90 a barrel by midday trading Europe, recovering from a two-day slump. The euro slipped 0.2%, and European stocks trimmed earlier gains following the news.

The truce, which began Wednesday, was intended to end 14 months of conflict along the Israel-Lebanon border, yet renewed hostilities have added to fresh supply fears.

The breach raises concerns about the fragile stability along the Israel-Lebanon border, where residents have been urged not to return due to safety concerns.

The OPEC+ alliance has rescheduled its crucial meeting on oil production policy to 5 December 2024, postponing it from the originally planned 1 December 2024, as several Ministers will be attending the 45th Gulf Summit in Kuwait.

Analysts expect the meeting to focus on the alliance's production cuts and their potential extension into 2024.

While OPEC+ had planned to gradually increase output if prices stabilised, persistently low prices have led to postponements. Some suggest the cuts could extend longer-term due to the market's slow response.

Goldman Sachs analysts, led by Daan Struyven, anticipate a measured approach from OPEC+.

"Any ramp-up in OPEC+ production will be gradual and data-driven," Struyven said, adding that compliance with production cuts is rising among members, a signal of stronger cohesion within the cartel.

Analy