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Oil prices edged up, with markets assessing the potential impact of a ceasefire deal between Israel and Hezbollah and Sunday's Opec+ meeting, in which the group could delay a planned increase to oil output.
Brent crude futures rose 29 cents, or 0.4 per cent, to $73.10 a barrel by 0750 GMT and US West Texas Intermediate crude was up 26 cents, or 0.4 per cent, at $69.03.
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 US and France.
The accord cleared the way for an end to a conflict across the Israeli-Lebanese border, which has killed thousands of people since it was ignited by the Gaza war last year.
"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 US 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 US President-elect Donald 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 that was due to start in January.
Opec+, which meets on Dec. 1 to decide policy for early 2025, pumps about half the world's oil and had planned to roll back oil production cuts gradually over 2024 and 2025. But a slowdown in Chinese and global demand, as well as rising output outside the group, have put a dampener on that plan.
"Our longstanding base case has been that Opec+ defers the tapering of output cuts all the way through 2025," Citi Research analysts said in a note, adding that the tapering could start in April instead of January.
"From the producer group's point of view, holding off the unwind could allow the market the chance to be more balanced, via supply disruptions or more resilient demand, while bringing barrels back makes lower prices a foregone conclusion."
In America, President-elect Trump said that he would impose a 25 per cent tariff on all products coming into the US from Mexico and Canada. Crude oil would not be exempt from the trade penalties, sources told Reuters on Tuesday.
Meanwhile, US 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