The ceasefire between Israel and Hezbollah raises hopes for peace in the Middle East. Meanwhile, the likelihood that OPEC countries will continue to cut production in order to support oil prices is increasing.
The oil price is under pressure. On Thursday, November 21, a barrel of Brent crude oil was at $74,23 per barrel. At the time of writing (Wednesday afternoon, November 27), that is $72,91.
The OPEC countries will meet on Sunday. It is a widely held expectation in the market that the voluntary production cuts of the oil cartel will be extended again. The production cut has been extended before, the last time until next January. Goldman Sachs also expects that the production cuts will be extended, according to various media based on a publication for clients of the investment bank. The bank even expects that the production cut will be extended until April 2025. According to Goldman Sachs, the oil production of Iraq, Kazakhstan and Russia fell by 0,5 million barrels per day in November due to the production cuts and that is curbing the price increases. The bank expects an oil surplus for next year and maintains the price forecast for a barrel of Brent crude oil at an average of $76 per barrel in 2025.
Today, the US Energy Agency (EIA) pulled a rabbit out of the hat in its weekly report. US gasoline inventories rose by a whopping 3,3 million barrels to 212,2 million, while analysts had expected a decline. Crude oil inventories fell by 1,8 million barrels.
Lebanon ceasefire
While it is only the beginning of peace in the Middle East, the ceasefire between Israel and Hezbollah in Lebanon does raise hopes for de-escalation. Analysts are speculating about how long the fragile truce will last.
Diesel price
The diesel price has been moving up in recent weeks, but has now taken a step down. Compared to a week ago, the price drops from €132,41 to €128,54 per 100 liters.