Oil Prices Up 2nd Day After Modest OPEC+ Hike, But Gains Limited
WASHINGTON, Oct 7 (Bernama-Sputnik/RIA Novosti) -- Crude prices managed to stay higher for a second straight session on Monday, after the largest oil producers in OPEC+ announced a smaller-than-expected output hike for November.
The market rebound was, however, anaemic, with gains averaging 1 per cent a day compared with the tumble of almost 7 per cent from last week’s four-day selloff, reported Sputnik/RIA Novosti.
US West Texas Intermediate crude for November delivery settled up US$0.81, or 1.3 per cent, to settle at US$61.69 per barrel, after Friday’s gain of 0.7 per cent.
UK Brent crude for December delivery gained US$0.94, or 1.5 per cent, to close at US$65.47 per barrel.
The eight largest oil producers in OPEC+ — Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman — announced on Sunday their second straight monthly output hike of 137,000 barrels per day (bpd). The market had speculated on increases of two to four times larger.
Analysts welcome the modest OPEC+ increases but also expressed worries about sagging US demand for oil.
“If demand falls more than expected — as seen recently in the US — the effect could be counterproductive, potentially disrupting the balance between supply and demand and creating a situation of excess supply against weak demand,” analyst Julian Pineda said in a commentary posted on Forex.com. ”This could fuel market fear around crude oil and revive selling pressure seen in prior weeks.”
OPEC+ production shift – from years of cuts aimed at boosting crude prices to increases now meant to grow exports – was largely responsible for the 10 per cent selloff over the last two months after July’s near 8 per cent rally.
Adding to the market’s downside was news that some 200,000 bpd had begun flowing again in Iraq’s northern Kurdistan territory, after being suspended since 2023.
--BERNAMA-SPUTNIK/RIA NOVOSTI