EBC Markets Briefing | Oil market muted after Gaza ceasefire
Oil prices were little changed in early Asian trade on Friday after falling more than 1% in the previous session, as Israel and Hamas agreed to the first phase of a plan to end the war in Gaza.
Under the deal, Israel will partially withdraw from Gaza, and Hamas will free all remaining hostages it captured, in exchange for hundreds of prisoners held by Israel.
After meeting on Sunday, the OPEC+ said that it would raise oil production by 137,000 bpd in November, citing "a steady global economic outlook and current healthy market fundamentals."
The hikes have been likely lower than the headline figures suggest though because some producers lack the spare capacity and others are compensating for previous overproduction.
Analysts warn that a supply shock could occur any day and expose the limitations of the OPEC+ in managing a "stable" oil market given increasingly fragmented and volatile geopolitical situation.
US output is expected to hit a larger record this year than previously expected, the EIA said on Tuesday, even as the agency warned that a glut of oil will weigh on prices in the months ahead.
Brent crude seemingly bottomed out at $64.74, gearing up for a modest rebound. However, it may find it hard to rise above 50 SMA soon with the Middle East on the cusp of peace.
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