Oil prices rose on Monday despite OPEC+ confirming at its Sunday meeting that it will wind down more than 1 million barrels per day of extra voluntary cuts over the next two months. At 9:34 a.m. ET on Monday, West Texas Intermediate (WTI) was trading up 1.65% at $62.89 per barrel, while Brent was up 1.74% at $66.64.
The expanded cartel endorsed a gradual rollback of Saudi Arabia, Iraq, and Kuwait’s additional curbs, with Saudi output expected to rise toward 9.5 million bpd in September and Iraq also set to increase exports, according to delegates cited by Bloomberg.
OPEC delegates argued that the move was consistent with stronger summer demand, especially in Asia, and pushed back on Wall Street forecasts warning of an oversupplied market. Goldman Sachs and others have predicted that unwinding the cuts could push Brent below $60 by year-end, but OPEC maintains that global demand growth of 1.8 million bpd in 2025 will keep balances tight.
Bloomberg reported that the group’s communique stressed compliance discipline and rejected claims that surging U.S. shale and weaker European demand would leave the market long. Separately, Bloomberg noted OPEC’s firm response to bearish calls, with officials pointing to underlying support for Brent in the mid-$70s range.
Physical indicators have not mirrored bearish forecasts. Bloomberg noted that Asian refiners raised bids for October cargoes from the Middle East last week, with premiums climbing despite the planned supply increase. In the U.S., EIA inventory data show gasoline and distillate inventories remain below the five-year average, keeping margins firm for refiners. Traders told Bloomberg that these conditions suggest prompt demand is holding up, even as forward curves soften. OPEC ministers will revisit these dynamics at the late-September OPEC+ monitoring committee, where compliance data and updated demand figures will be reviewed.
By Charles Kennedy for Oilprice.com
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