Oil prices rose sharply on Monday following OPEC+'s decision to delay plans to increase production by a month, as the market prepares for a week that includes the US presidential election and a key meeting in China.
The price of Brent gained more than 2% at the start of the morning, to 74.4 dollars and the American WTI advanced 2.3%, to 70.9 dollars.
On Sunday, OPEC+, which includes the Organization of the Petroleum Exporting Countries, Russia and other allies, said it would extend its production cut of 2.2 million barrels per day (bpd) for another month additional in December, with an increase already postponed from October due to falling prices and weak demand.
The group was to increase its production by 180,000 bpd from December.
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“While the delay to January does not significantly change fundamentals, it potentially forces the market to rethink OPEC+ strategy”estimated ING analysts in a note. “This delay in increasing supply means the group may be more willing to support prices than many think”they added.
OPEC+ is expected to gradually end the 2.2 million bpd cut over the coming months, while another 3.66 million bpd production cut will be maintained until the end of 2025.
Last week, Brent and WTI recorded weekly declines of around 4% and 3% respectively, as record US production and the lack of escalation between Israel and Iran weighed on the price of the oil.
(With Reuters)
