Tokyo — Oil prices gained more than 1% on Monday, trimming some of last week’s losses, as the prospect of more sanctions on Russian crude after an overnight strike on Ukraine offset Opec+’s planned output increase.
Brent crude climbed 80c, or 1.2%, to $66.30 a barrel by 3.45am GMT, while US West Texas Intermediate (WTI) crude rose 75c, or 1.2%, to $62.62 a barrel.
Both benchmarks fell more than 2% on Friday as a weak US jobs report dimmed the outlook for energy demand. They lost more than 3% last week.
Opec+, which includes oil cartel Opec plus Russia and other allies, agreed on Sunday to further raise oil production from October as its leader Saudi Arabia pushes to regain market share, while slowing the pace of increases compared with previous months.
Opec+ has been increasing production since April after years of cuts to support the oil market, but the latest decision came as a surprise amid a likely looming oil glut in the northern hemisphere winter months.
Eight members of Opec+ will lift production from October by 137,000 barrels a day (bbl/day), far below the monthly increases of about 555,000bbl/day for September and August and 411,000bbl/day in July and June.
“Buying emerged as the output increase was smaller than anticipated, while fading prospects for peace in the Russia-Ukraine war and views that Russian oil won’t flood the market also supported prices,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.
Russia launched its largest air attack of the war on Ukraine, setting the main government building on fire in central Kyiv and killing at least four people, Ukrainian officials said on Sunday.
US President Donald Trump said on Sunday that individual European leaders would visit the US on Monday and Tuesday to discuss how to resolve the Russia-Ukraine war.
Trump added that he was “not happy” about the status of the war, but he again expressed confidence that the war would soon be settled.
“The oil market was supported by relief over Opec+’s modest output hike and a technical bounce following last week's decline,” said Toshitaka Tazawa, an analyst at Fujitomi Securities, adding the Opec+ output hike had been priced in since last week.
“Expectations of tighter supply from potential new US sanctions on Russia are also lending support,” he said.
In a note at the weekend, Goldman Sachs said it expected a slightly larger oil surplus in 2026 as supply upgrades in the Americas outweigh a downgrade to Russia supply and stronger global demand.
It left its Brent/WTI price forecast unchanged for 2025 and projected the 2026 average at $56/$52 a barrel, saying, “risks to our 2025/26 price forecast are two-sided but skewed modestly to the upside.”
Reuters
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