By Handan Kazanci
ANKARA (AA) - Oil prices edged lower on Tuesday, adding to Monday's losses, amid expectations of a potential Lebanon cease-fire deal to make a push for a similar effort in Gaza.
The international oil benchmark of Brent crude fell 0.05% to $72.58 per barrel at 10.23 a.m. local time (0723 GMT), down from the previous session's close of $72.62.
The US benchmark West Texas Intermediate also declined by 0.05% to $68.93 per barrel, compared to $68.97 at the prior session's close.
US President Joe Biden's senior envoy for the Middle East Brett McGurk will visit Saudi Arabia, "where he will discuss using the potential of a cease-fire deal in Lebanon as a catalyst for a potential Gaza cease-fire and for the return of hostages and for increased stability in the region," White House spokesperson Andy Bates told reporters.
The White House earlier acknowledged "significant progress" in efforts to broker a cease-fire between Israel and the Lebanese Hezbollah group but said more work remains before a pact can be completed.
A cease-fire agreement between Hezbollah and Israel is nearing completion and could be declared within the next 36 hours if negotiations proceed smoothly, a Lebanese parliamentarian said Monday.
"The atmosphere is positive, and cease-fire discussions have reached an advanced stage. It's only a matter of hours before an agreement is finalized and announced if progress continues as expected," Qassem Hashem, Lebanese lawmaker, told Anadolu.
Israel has escalated its airstrikes in Lebanon against what it claims are Hezbollah targets as part of year-long warfare against the Lebanese group since the start of the Gaza war last year.
More than 3,600 people have been killed in Israeli attacks in Lebanon, with more than 15,300 injured and over a million displaced since October 2023, according to Lebanese health authorities. On Oct. 1, 2024, Israel expanded the conflict by launching a ground invasion of southern Lebanon.
Meanwhile, expectations of US policy impact on the global economy and credit outlook continue to influence oil prices.
Experts warn that fiscal expansion in the US, the world's largest oil consumer, coupled with labor market tightness, low immigration, and rising tariffs, could reignite inflationary pressures and push bond yields higher.
Rising US bond yields, a strengthening dollar, and heightened market volatility are amplifying concerns about potential risks to emerging markets. As dollar soars, dampening oil demand and driving down prices.
Rising US bond yields, tight labor markets, and heightened market volatility are stoking fears of renewed inflationary pressures and risks in emerging markets, which could dampen oil demand globally.
Meanwhile, market expectations of continued interest rate reductions by the US Federal Reserve are partially offsetting downward pressure on oil prices.
Federal Reserve Bank of Chicago President Austan Goolsbee said on Monday that he expects the Fed to continue lowering rates toward a neutral stance that neither stimulates nor restricts economic activity.
"Barring some convincing evidence of overheating, I don’t see the case for not continuing to have the fed funds rate decline," said.