The main oil-producing countries announced on Sunday, November 3, that they “would postpone their plans to gradually increase oil production until the end of December”notes The New York Times.
OPEC +, which brings together members of the Organization of the Petroleum Exporting Countries and ten other producing countries, including Russia, undoubtedly wanted “avoid destabilizing the markets, particularly before the close presidential election this Tuesday in the United States”, the American daily speculates.
OPEC + announced before the summer that it would increase its production by “2.2 million barrels per day, or around 2% of global supply, in October”making the markets nervous, before going back in September, deciding to postpone this measure “at least until December”.
Geopolitical risks
This decision is undoubtedly linked, according to the New York daily, to the recent drop in oil prices, with investors estimating that “the geopolitical risks linked to the conflict between Israel and Hamas had diminished”.
But this is not the only explanation. Prices for Brent, the North Sea crude oil, have “fallen by almost 14% over the last twelve months”, underlines the Financial Times. According to the economic daily, the postponement of the extraction of “180,000 barrels per day” additional has something to do with economic uncertainties in China.
Oil prices “became more and more volatile”, notes Bloomberg. Thus, the OPEC + decision had the immediate consequence of a 2.5% increase in the price of Brent which “exceeds 74 dollars per barrel” this Monday, November 4. Markets fear oversupply in 2025, due to a “lackluster demand in China, the main importing country”, et “unrest in the Middle East, which supplies a third of the world’s crude.”
Moreover, the evolution of gas prices “follows that of oil”, notes the American economic media in another article. In Europe and the United Kingdom, on the futures markets, natural gas prices increased by 1.5% and 2.4% respectively on Monday.
