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Brent crude up 0.6% at $73.44

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Trump says he will impose 25% tariff on Canadian, Mexican

goods

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President-elect plans to increase U.S. oil drilling

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Israel and Hezbollah close to ceasefire deal

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OPEC+ could leave output cuts in place from Jan. 1

(Updates prices and adds background)

By Paul Carsten and Enes Tunagur

LONDON, Nov 26 (Reuters) - Oil prices picked up on

Tuesday, after the previous session's sell-off, as the market

assessed U.S. President-elect Donald Trump's planned trade

tariffs on Mexico and Canada and his aim to increase U.S. crude

production.

Oil prices had fallen more than $2 a barrel on Monday after

multiple reports that Israel and Lebanon had agreed to the terms

of a ceasefire in the Israel-Hezbollah conflict. A senior

Israeli official said Israel looks set to approve a U.S. plan

for a ceasefire on Tuesday, but some analysts said Monday's

sell-off in oil prices had been overdone.

Brent crude futures were up 43 cents, or 0.6%, at

$73.44 a barrel as of 1414 GMT. U.S. West Texas Intermediate

crude futures were at $69.38 a barrel, up 44 cents, or

0.6%.

Brent crude futures fluctuated between $73.30 and $73.80 a

barrel in afternoon trading.

"Today's intra-day fluctuations are probably more of the

function of assessing Trump's overnight pledge to impose tariffs

on Mexico, Canada and China," PVM analyst Tamas Varga said.

On Monday, Trump said he would impose a 25% tariff on

all products coming into the U.S. from Mexico and Canada.

The vast majority of Canada's 4 million bpd of crude exports

go to the U.S. Analysts have said it is unlikely Trump would

impose tariffs on Canadian oil, which cannot be easily replaced

since it differs from grades that the U.S. produces.

On Monday, Reuters reported that Trump's team is also

preparing an energy package to roll out within days of his

taking office that would increase oil drilling.

A senior executive at Exxon Mobil ( XOM ) said on Tuesday

that U.S. oil and gas producers are unlikely to "radically

increase'' production.

OPEC+ MEETING

Market reaction on Monday to the Israel-Lebanon ceasefire

news was "over the top" as the broader Middle East conflict has

"never actually disrupted supplies significantly to induce war

premiums" this year, said senior market analyst Priyanka

Sachdeva at Phillip Nova.

Elsewhere, OPEC+ at its next meeting on Sunday may consider

leaving its current oil output cuts in place from Jan. 1. The

producer group is already postponing hikes amid global demand

worries.

OPEC+ members Iraq, Saudi Arabia and Russia agreed in a

meeting on Tuesday on the importance of maintaining stable oil

markets and fair prices, Iraq's Prime Minister Office said.