Brent crude futures rose 33 cents, or 0.45%, to $73.49 a barrel by 1300 GMT and U.S. West Texas Intermediate crude was up 37 cents, or 0.54%, at $69.14.
Both benchmarks settled lower on Tuesday after Israel agreed to a ceasefire deal with Lebanon's Hezbollah.
The ceasefire between Israel and Iran-backed Hezbollah came into effect on Wednesday after both sides accepted the agreement brokered by the U.S. and France.
"Market participants are assessing whether the ceasefire will be observed," said Hiroyuki Kikukawa, president of NS Trading, part of Nissan Securities.
"We expect WTI to trade within the range of $65-$70 a barrel, factoring in weather conditions during the Northern Hemisphere's winter, a potential increase in shale oil and gas production under the incoming Donald Trump administration in the U.S. and demand trends in China."
Heads of commodities research at Goldman Sachs and Morgan Stanley said that oil prices are undervalued, citing a market deficit and risk to Iranian supply from possible sanctions under U.S. President-elect Trump.
Sources from the OPEC+ group comprising the Organization of the Petroleum Exporting Countries and allies led by Russia have said the producer group is discussing a further delay to the oil output increase set for January.
The group, which produces about half the world's oil, had aimed to gradually ease production cuts through 2024 and 2025, but weaker global demand and rising output outside OPEC+ have cast doubt on that plan. The decision will be made at the Dec.1 meeting.
"The calmness seen in the price action and lack of trending conditions suggests oil traders see the OPEC+ meeting as a lower volatility affair, with the group likely to swing to an almost unanimous call to hold off from unwinding its 2.2 million barrels a day voluntary cuts until Q1 2025," said Chris Weston, head of research at Pepperstone.
In America, Trump said that he would impose a 25% tariff on all products coming into the U.S. from Mexico and Canada. Crude oil would not be exempt from the trade penalties, sources told Reuters on Tuesday.
Meanwhile, U.S. crude oil stocks fell and fuel inventories rose last week, market sources said on Tuesday, citing API figures.
Crude stocks fell by 5.94 million barrels in the week ended Nov. 22, exceeding analyst expectations of a drop of about 600,000 barrels.
(Reuters, November 27, 2024)