Oil Rises Supported by Caution from "OPEC+" and Geopolitical Tensions

Oil prices returned to rise in trading today, Tuesday, recording a slight increase supported by the "OPEC+" alliance's decision to reduce the pace of production increase, which eased market fears of an oil supply surplus.

Brent crude recorded slight gains of 0.1% to reach $65.59 per barrel, while West Texas Intermediate crude rose by 0.1% to $61.80 per barrel, continuing the gains from the previous session where both crude types closed up more than 1%.

This improvement came after the "OPEC+" alliance - which includes OPEC, Russia, and several smaller producers - decided to increase its production by only 137,000 barrels per day starting in November, a rise lower than market expectations.

In this regard, analysts at "ING" commented that "this step contradicts market expectations that indicated a return of supplies at a stronger pace, showing that the group is still cautious in increasing its production share within the global oil market, amid expectations of a supply surplus during the fourth quarter of this year and also during the next year, according to Reuters."

Geopolitical tensions also contributed to supporting prices, as the conflict between Russia and Ukraine has raised uncertainty about Russian crude supplies, especially after the "Kirishi" refinery in Russia halted its most active production units due to the attack it was subjected to.

Two sources in the sector confirmed yesterday, Monday, that the "Kirishi" Russian oil refinery halted its most active production units after a drone attack on October 4 caused a fire, and maintenance work is likely to take about a full month.

Despite these supportive factors, experts warn that prices may face downward pressure due to expectations of increased supply from "OPEC+" producers and others, and weak demand expected due to a slowdown in global economic growth and U.S. tariffs, which may exacerbate the surplus in global markets.