Singapore — Oil prices climbed on Monday after Opec+ decided to hold off production hikes in the first quarter of next year, which eased the rising fear of a supply glut, but weak factory data in Asia capped the gains.
Brent crude futures rose 24c, or 0.37%, to $65.01 a barrel by 4.24am GMT after closing 7c higher on Friday. US West Texas Intermediate (WTI) crude was at $61.19 a barrel, up 21c, or 0.34%, after settling up 41c in the previous session.
Oil cartel Opec and its allies, known as Opec+, agreed on Sunday to raise output by 137,000 barrels a day (bbl/day) in December, the same as for October and November.
“Beyond December, due to seasonality, the eight countries also decided to pause the production increments in January, February, and March 2026,” the group said in a statement.
ING head of commodities research Warren Patterson said the Opec+ decision appeared to be an acknowledgement of the large surplus that the market faces, particularly through early next year.
“Obviously, still plenty of uncertainty over the scale of the surplus, which will be dependent on how disruptive US sanctions will be to Russian oil flows,” he said.
RBC Capital head of commodities strategy Helima Croft also noted that Russia remained a key supply wild card in the wake of the US imposing sanctions on top Russian producers Rosneft and Lukoil as well as the ongoing strikes on the country’s energy infrastructure as part of the Ukraine war.
“There is ample ground for a cautious approach given the uncertainty over the [first-quarter] supply picture and the anticipated demand softness,” she said.
A Ukrainian drone attack struck Tuapse on Sunday, one of Russia’s main Black Sea oil ports, causing a fire and damaging at least one ship.
Brent and WTI both fell more than 2% in October, down for a third consecutive month, hitting a five-month low on October 20 on the supply glut fears and economic concerns about US tariffs.
Analysts are holding their oil price forecasts largely unchanged as rising Opec+ output and lacklustre demand offset geopolitical risks to supply, a Reuters poll showed. Estimates of oil market surplus ranged anywhere from 190,000bbl/day to 3-million barrels a day.
The Energy Information Administration reported on Friday that US crude oil output rose 86,000bbl/day to a record 13.8-million barrels a day in August.
Headwinds for Asia’s big manufacturing hubs persisted in October, business surveys showed on Monday, as weak US demand and tariffs under President Donald Trump hit factory orders across the region. Asia is the world’s biggest oil-consuming region.
On Friday, President Donald Trump denied he was considering strikes inside Opec member Venezuela amid intensifying expectations that Washington may expand drug-trafficking-related operations there.
Reuters
