Oil prices rise 1.5% supported by the conservative decision of "OPEC+" to increase production
Oil prices saw a significant increase in trading on Monday, supported by the recent decision of the "OPEC+" alliance to reduce the monthly production increase to a level below expectations, which eased concerns about a global supply surplus.
Brent crude futures rose by 1.5% to record $65.53 per barrel, while West Texas Intermediate crude jumped 1.6% to $61.87 per barrel.
The "OPEC+" alliance announced on Sunday its approval to increase oil production for November by 137,000 barrels per day, maintaining the same level of increase it approved for October, reflecting its continued cautious stance regarding the risks of increased supply.
Independent analyst Tina Teng commented: "The current rise in prices was primarily due to OPEC+'s decision to raise production by less than expected next month, in an attempt to mitigate the impact of the recent decline in oil markets."
Teng added, warning: "However, oil prices are likely to remain weak due to the bleak outlook for the global economy."
In related news, informed sources prior to the alliance meeting revealed that Russia adopted a supportive stance for increasing production at this level to maintain price stability, while Saudi Arabia leaned towards preferring a larger increase that could reach three or even four times the proposed figure, in an effort to regain its market share more quickly.
Analysts at "ANZ" Bank noted in a memo that "OPEC+'s decision to raise production by 137,000 barrels per day in November may seem acceptable in light of the increasing supply disruptions due to tightening U.S. and European sanctions on Russia and Iran."
Analysts also highlighted Ukraine's continued intensification of attacks on Russian oil infrastructure, targeting the "Kirish" refinery, which is one of the largest oil refineries in Russia with an annual processing capacity exceeding 20 million tons.
On the other hand, the G7 confirmed last week its intention to take additional steps to increase pressure on Russia, by targeting entities that continue to purchase Russian oil or facilitate evasion of sanctions, as part of efforts to deprive Moscow of its oil revenues due to its war in Ukraine.
Despite this daily rise, analysts expect that weak demand fundamentals in the fourth quarter of the year will limit price gains in the near term, maintaining a state of uncertainty surrounding the future of global oil markets.
