OPEC+ Output Hike Falls Short of Expectations
Oil prices regained more than $1 on Monday, recovering part of last week’s decline after OPEC+ agreed to raise production by just 137,000 barrels per day starting in October. This increase is significantly lower than previous monthly hikes—555,000 bpd in August and September, and 411,000 bpd in June and July—signaling restraint from the cartel despite forecasts of a winter supply surplus.
Analysts viewed the decision as underwhelming, suggesting that some of the additional output is already in the market due to member overproduction. “The market had run ahead of itself in regards to this OPEC+ increase,” said Saxo Bank’s Ole Hansen, calling Monday’s rally a “sell the rumour, buy the fact” reaction.
Sanctions Threat on Russian Oil Lends Support
Oil prices also drew support from concerns over the possibility of new sanctions on Russian crude. U.S. President Donald Trump indicated over the weekend that the administration is prepared to move to a second phase of sanctions targeting Russia or its oil buyers. Tensions escalated further after Russia launched its largest airstrike on Ukraine since the war began, increasing geopolitical risk premiums in crude markets.
Energy trader Gunvor warned that fresh sanctions could disrupt crude flows, potentially tightening global supply at a time when inventories are expected to build.
