London (awp/afp) – Oil prices rose on Monday, driven by the announcement of the extension of voluntary oil production cuts by eight members of OPEC+ (Organization of the Petroleum Exporting Countries) and geopolitical uncertainties.
Around 09:35 GMT (10:35 CET), the price of a barrel of Brent from the North Sea, for delivery in January, rose 2.60% to $75.08.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in December, gained 2.82%, to $71.52.
The rise in oil prices is “inspired by the news from OPEC+”, explains Tamas Varga, analyst at PVM.
Eight members of OPEC+, including Saudi Arabia and Russia, announced on Sunday an extension of their oil production cuts until the end of December, thus postponing the reopening of the floodgates in the face of falling prices.
The eight countries “agreed to extend their additional voluntary production reductions of 2.2 million barrels per day for another month,” the alliance said in a statement.
The reintroduction of this volume must be done gradually, to the tune of 180,000 barrels per month for twelve months, but only if conditions permit, recalls Giovanni Stauvono, analyst at UBS.
This is a “signal to American shale producers” so that they are more “cautious in their investment and production decisions” in 2025, with the risk of a fall in prices still present, analysis Giovanni Stauvono.
The market's reaction towards a price increase is also supported by “the tense context of a threat of attack by Iran against Israel and the American elections”, develops Tamas Varga.
A victory for Donald Trump, who favors fossil fuels, could push prices up in the short term.
In the Middle East, Iran warned Thursday that it would provide a “brutal” response to the Israeli attack carried out on October 25 against its military installations.
Such an escalation would have huge upward consequences on oil prices, although Iranian President Massoud Pezeshkian said on Sunday that a possible ceasefire between Tehran's allies and Israel could affect the “intensity and the nature” of his country's response.
afp/al
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