Oil prices rallied on Monday after OPEC+ decided to postpone its planned production increase by a month, with Brent crude rising by $1.39 to reach $74.49 per barrel and U.S. West Texas Intermediate (WTI) climbing by $1.41 to $70.90. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, cited weak demand and declining prices as reasons to delay the increase of 180,000 barrels per day (bpd) initially scheduled for December. This move maintains an existing output cut of 2.2 million bpd until January.
“This delay signals that OPEC+ might be more committed to stabilizing prices than many thought,” noted Warren Patterson, Head of Commodities at ING. “Even if it doesn’t change the fundamentals, it sends a strong message to the market that the group is willing to step in when prices fall too low.”
Other analysts, however, remain cautious. “OPEC+ faces a balancing act,” said Yeap Jun Rong, Market Strategist at IG. “The delayed supply might offer some short-term relief, but we’re likely to see resistance at around $78.50. The current rally could fizzle out if demand doesn’t pick up.”
The oil market is also on edge as it awaits major global events this week. “With the U.S. presidential election tomorrow and potential interest rate cuts from the Federal Reserve on Thursday, we’re in for a volatile period,” observed Rebecca Chang, Chief Economist at Capital Insight. “Any unexpected outcomes could add pressure on oil prices.”
In China, meanwhile, the Standing Committee of the National People’s Congress is expected to approve new economic stimulus measures, potentially adding demand support for oil. Yet, given ongoing geopolitical risks in the Middle East, experts remain cautious about the sustainability of this recent price increase.
