Oil Gains As OPEC+ Hints At Caution With Constrained Output Hike
Brent climbed above $66 a barrel after losing almost 4% last week, when it became apparent that an output hike was on the way.
Oil clawed back some of last week’s loss after OPEC+ agreed to raise production at a modest rate and against a backdrop of doubts about how many of its members can keep lifting output.
The hike marks the reversal of cuts that were set to remain in place until the end of 2026 —following the rapid return of a previous tranche of idled barrels over recent months — as the alliance seeks to reclaim market share. It signals the group has the confidence to push its bold oil market strategy a little bit further.
Brent climbed above $66 a barrel after losing almost 4% last week, when it became apparent that an output hike was on the way. Prices also pushed higher after Bloomberg News reported that the European Union is exploring new sanctions on Russian banks and energy companies as part of its latest measures to end the war in Ukraine, a move it’s hoping to coordinate with the US.
The Organization of the Petroleum Exporting Countries and its partners will add 137,000 barrels a day in October, smaller than the increments scheduled for the previous two months. The actual volume is likely to be lower than announced, as some members of the group face pressure to forgo their share of increases to compensate for previous hikes, while others lack spare capacity.
Early last month, the International Energy Agency predicted the surplus would reach a record next year, which Goldman Sachs Group Inc. forecasts will push Brent to the low-$50s. The global benchmark is down more than 10% this year, with President Donald Trump’s trade tariffs also weighing on the energy demand outlook.
OPEC+ said on Sunday that restarting the remainder of the 1.66 million barrels of cuts would be contingent on “evolving market conditions,” and increases could be reversed. The group’s faster-than-expected return of idled barrels over recent months stunned sections of the oil market, but prices have held up relatively well following an initial slump in April.
“The market had expected a bigger unwind,” FGE NexantECA Chairman Emeritus Fereidun Fesharaki said on Bloomberg Television, adding that oil could still fall below $60 a barrel into the end of the year and the start of 2026. “Until you actually see inventories building up, then there will be no impact.”
Saudi Arabia’s Crown Prince Mohammed bin Salman is visiting Washington in November to meet with Trump, indicating there could also be political considerations behind the supply decision. The US president has repeatedly called for lower fuel prices as he seeks to tame inflation.
China’s stockpiling of roughly 200,000 barrels a day in recent months has helped to support demand, Frederic Lasserre, global head of research and analysis at Gunvor Group, said at the Asia Pacific Petroleum Conference in Singapore on Monday. Still, the country might not be able to absorb all of the impending market surplus, he added.
Prices:
Brent for November settlement was 1.9% higher at $66.73 a barrel as of 10:11 a.m. in London.
WTI for October delivery rose 1.9% to $63.02 a barrel.
