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Nov 26 Reuters Oil prices edged higher in early trade on Tuesday after falling in the previous session as investors took stock of a potential ceasefire between Israel and Hezbollah, weighing on oil39;s risk premium.

Brent crude futures rose 15 cents, or 0.21, to 73.16 a barrel as at 0705 GMT, while U.S. West Texas Intermediate crude futures were at 69.09 a barrel, up 15 cents, or 0.22.

Both benchmarks settled down 2 a barrel on Monday following reports that Lebanon and Israel had agreed to the terms of a deal to end the IsraelHezbollah conflict, which triggered a crude oil selloff.

Market reaction to the ceasefire news was over the top, said senior market analyst Priyanka Sachdeva at Phillip Nova.

While the news calmed fear of disruption to Middle Eastern supply, the IsraelHamas conflict never actually disrupted supplies significantly to induce war premiums this year, Sachdeva said.

The vulnerability of oil prices to geopolitical headlines lacks foundational backup and, coupled with the inability to maintain recent gains, reflects weakening global demand for oil and suggests a volatile market ahead.

Iran, which supports Hezbollah, is an OPEC member with production of around…