Oil prices steadied in early trade on Wednesday, with markets assessing the potential impact of a ceasefire deal between Israel and Hezbollah, and ahead of Sunday's OPEC+ meeting.
Brent crude futures fell 2 cents to $72.79 a barrel by 0114 GMT, while U.S. West Texas Intermediate crude futures were at $68.73 a barrel, down 4 cents, or 0.1%.
Both benchmarks settled lower on Tuesday after Israel agreed to a ceasefire deal with Lebanon's Hezbollah.
A ceasefire between Israel and Hezbollah will take effect on Wednesday after both sides accepted an agreement brokered by the United States and France, U.S. President Joe Biden said on Tuesday.
The accord cleared the way for an end to a conflict across the Israeli-Lebanese border that has killed thousands of people since it was ignited by the Gaza war last year.
Read more: Oil prices dip after 6% weekly surge, geopolitical tensions keep market volatile
Israeli Prime Minister Benjamin Netanyahu said he was ready to implement a ceasefire deal with Lebanon and would "respond forcefully to any violation" by Hezbollah.
"Market participants are assessing whether the ceasefire will be observed," said Hiroyuki Kikukawa, president of NS Trading, a unit 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," he said.
OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, are discussing a further delay to a planned oil output hike that was due to start in January, two sources from the producer group said on Tuesday, ahead of a meeting on Dec. 1 to decide policy for early 2025.
The group pumps about half the world's oil and had planned to gradually roll back oil-production cuts with small increases over many months in 2024 and 2025. But a slowdown in Chinese and global demand, and rising output outside the group, have put a dampener on that plan.
In the U.S., President-elect Donald Trump said 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, two sources familiar with the plan told Reuters on Tuesday.
Meanwhile, U.S. crude oil stocks fell while fuel inventories rose last week, market sources said, citing API figures on Tuesday.
Crude stocks fell by 5.94 million barrels in the week ended Nov. 22, exceeding analysts' forecast of a drop of about 600,000 barrels.
