After OPEC+ Decision to Increase Production.. Oil Prices Rise

SadaNews - Oil started its trading on a rise after the OPEC+ alliance agreed to an increase in oil production that was less than what the market had anticipated.

Brent crude rose above $65 per barrel, while West Texas Intermediate crude reached around $62. The beginning of the Asian trading session witnessed higher-than-usual activity, with about 2000 contracts of both crude types traded in the first five minutes, according to Bloomberg.

The U.S. agency quoted Chris Weston, head of research at Pepperstone Group, saying that the move "clearly came in below market expectations", pointing out that the rise in prices is attributed to traders, who were prepared for a larger increase, adjusting their tactical positions.

Additional Increase in Production

During a virtual meeting held on Sunday that included Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman, OPEC+ agreed to an additional increase in oil production of 137,000 barrels per day starting next November.

The decision came "in light of the stable outlook for the global economy and the current positive market fundamentals, as evidenced by the decline in oil inventories," according to a statement from the Saudi Ministry of Energy following the meeting.

The countries confirmed that they would hold monthly meetings to monitor market developments, compliance levels, and the implementation of compensation plans, according to a statement from the Saudi Ministry of Energy.

This decision constitutes a continuation of the process of reintroducing a new tranche of supplies totaling 1.65 million barrels per day, which began last month with the return of 137,000 barrels per day to the market.

The alliance had effectively ended in August a tranche of voluntary cuts that eight countries committed to since 2023 amounting to 2.2 million barrels per day, by increasing production at that time by 547,000 barrels per day.

Monitoring Market Developments

OPEC+ clarified in its statement that the additional voluntary cuts of 1.65 million barrels may be reinstated partially or fully depending on the developments of market conditions and gradually. It mentioned that the next meeting of the eight member countries will be held on November 2, 2025.

In August, OPEC raised its oil demand growth forecast for 2026 to 1.4 million barrels per day, an increase of 100,000 barrels from the previous month's forecast, for the first time this year. However, it maintained its demand growth forecast for this year at 1.3 million barrels for the fifth consecutive month.

Crude has declined this year, including an 8% drop last week, amid market fears that global supplies may exceed demand levels.

The "International Energy Agency" had predicted a record annual surplus in 2026, while many Wall Street banks expected prices to decrease in the coming months as market balances shift.