### Oil Prices Decline Amid Middle East Tensions and Anticipated Supply Increase

Oil prices took a notable dip on Friday, marking a weekly decrease of 3%, due to reduced anxiety regarding supply disruptions linked to the Israel-Hezbollah conflict and the expectation of a rise in supply come 2025, even as OPEC+ is likely to continue with its production cuts.

Brent crude futures experienced a fall of 34 cents or around 0.46%, closing at $72.94 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures declined more sharply, settling at $68 per barrel, down by 72 cents or 1.05% compared to Wednesday’s closing price. The trading scene remained relatively calm in light of a U.S. public holiday. Over the course of the week, Brent recorded nearly a 3% drop, while WTI saw a larger decline of 4.55%.

The geopolitical tensions between Israel and Hezbollah saw a development on Friday when four Israeli tanks moved into a Lebanese border village, as reported by Lebanon's official news agency. Despite allegations of ceasefire breaches from both parties, the truce that began on Wednesday has led to a lowered risk premium on oil, subsequently dragging prices down. Nonetheless, the ongoing conflict in the Middle East has not impacted oil supply, which is projected to be more abundant by 2025.

According to the International Energy Agency, the world might see an excess supply of over 1 million barrels per day, which is more than 1% of global production. Tamas Varga from oil brokerage PVM noted, “The updated snapshot insinuates that next year promises to be looser than the current one and oil prices are to average below the 2024 level.”

Looking ahead, the OPEC+ coalition, consisting of the Organization of the Petroleum Exporting Countries and its allies, including Russia, has postponed its forthcoming policy meeting from December 1 to December 5. During this meeting, the group is anticipated to deliberate on further extending their ongoing production cuts.