After OPEC+ Production Increase.. Oil Prices Rise

SadaNews - Oil prices rose following the announcement by the "OPEC+" alliance regarding a modest increase in production starting from next October, in a move that reflects the alliance's caution amid expectations of a global supply glut.

The new agreement is seen as a gradual retreat from reductions that were scheduled to last until the end of 2026, and comes after months of a rapid return of halted barrels, as "OPEC+" aims to abandon its goal of supporting prices in favor of reclaiming its market shares.

The alliance will add only 137,000 barrels per day in October, compared to larger increases in the previous two months, following a meeting that lasted only 11 minutes.

Brent crude price jumped above $66, and West Texas Intermediate (WTI) moved towards $63, recovering some of the sharp losses recorded in the markets at the end of last week, following leaks about the intention to raise production.

Despite this rise, surplus risks still loom on the horizon, as the International Energy Agency predicted last month that a record surplus in global supply would occur in 2026, while "Goldman Sachs" believes this glut may push Brent prices toward levels in the early fifties.

Production increase is conditional

The "OPEC+" alliance confirmed in its statement that the return of the remaining 1.66 million barrels from the reductions will depend on "changing market conditions", indicating that it might retract future increases if necessary.

The markets quickly absorbed the news, as Chris Weston, head of research at "Pepperstone" in Melbourne, noted that "the absence of selling pressure at the opening shows that the market had anticipated the decision." He also clarified that the $65 level for Brent constitutes an important technical support.

Some analyses indicate that raising quotas does not necessarily mean an increase in exports, given the presence of countries like Kazakhstan facing pressures to compensate for previous production overruns, while other countries lack surplus energy.

Vandana Hari, founder of "Vanda Insights", stated that "the limited increase in October makes recent sell-offs appear exaggerated," indicating that the market may see some buying in the upcoming sessions.

Attention is also directed towards the results of the anticipated visit of Saudi Crown Prince Mohammed bin Salman to Washington in November to meet with U.S. President Donald Trump, as the U.S. administration seeks to curb inflation and reduce fuel prices.