Oil prices climbed further on Monday, with gains exceeding $1 per barrel following OPEC+’s decision to postpone its scheduled output increase by a month. The market now faces a pivotal week with the U.S. presidential election and a key meeting in China on the horizon.
By 10:22 a.m. Saudi time, Brent futures rose by $1.39, or 1.9%, to $74.49 a barrel, while U.S. West Texas Intermediate (WTI) increased by $1.41, or 2.0%, reaching $70.90 per barrel.
OPEC+, comprising the Organization of the Petroleum Exporting Countries along with Russia and other allies, announced on Sunday that it would maintain its current production cut of 2.2 million barrels per day (bpd) through December. This extends an already delayed output increase initially scheduled for October due to declining prices and weak demand. The group had originally planned to raise output by 180,000 bpd in December.
“While delaying the increase until January doesn’t significantly shift market fundamentals, it may prompt a reassessment of OPEC+’s strategy,” ING analysts commented in a note, noting that some market participants had expected OPEC+ to proceed with the planned hike. “This move suggests the group may be more committed to supporting prices than previously thought,” they added.
OPEC+ intends to gradually roll back the 2.2-million-bpd cut in the coming months, while an additional 3.66 million bpd in cuts will remain until the end of 2025.
Last week, Brent and WTI both posted losses of approximately 4% and 3%, respectively, as record U.S. output exerted downward pressure on prices. However, both rebounded slightly on Friday amid reports that Iran could retaliate against Israel in the coming days. U.S. news site Axios reported on Thursday that Israeli intelligence had indicated potential Iranian attacks from Iraq, according to unnamed Israeli sources.
Investors are also eyeing Tuesday’s U.S. presidential election, where polls show Democratic Vice President Kamala Harris and former Republican President Donald Trump in a close race. Additionally, the U.S. Federal Reserve is expected to announce a 25-basis-point interest rate cut on Thursday.
