Oil price under pressure after strong weekly gain – Commerzbank

The Brent oil price came under pressure at the start of the week and fell by nearly 3% to $73 per barrel. This was triggered by the possible agreement on a ceasefire between Israel and Hezbollah, Commerzbank’s commodity analyst Carsten Fritsch notes.

OPEC+ likely to postpone production increase

“The Middle East conflict has not yet led to any supply shortfalls on the oil market. However, a ceasefire could also ease the still flaring conflict between Israel and Iran, which could have the potential to disrupt oil supplies. Concerns about supply disruptions due to the escalation in the war in Ukraine caused oil prices to rise by 6% last week, the strongest weekly increase since the Iranian missile attack on Israel at the beginning of October.”

“The upcoming OPEC+ meeting on Sunday is already casting its shadow. According to the energy minister of Azerbaijan, maintaining current oil production levels beyond the end of the year could be considered. So far, OPEC+ has planned a gradual increase in production from January, but this would lead to a considerable oversupply next year based on IEA forecasts.”

“The vast majority in a Bloomberg survey expects the planned production increase to be postponed once again. Half of this group assumes that oil production will not be increased before the second quarter. We also expect OPEC+ to decide to postpone the increase until at least the end of the first quarter.”