Oil Steady, Supply Tight
World oil prices strengthened on Tuesday after OPEC+ decided to increase production by less than market expectations, while concerns about tightening supply due to potential new sanctions against Russia also supported prices. Brent rose 45 cents, or 0.53%, to US$66.46 per barrel, while WTI added 32 cents, or 0.51%, to US$62.70.
At its meeting last Sunday, OPEC+ agreed to increase production starting in October by 137,000 barrels per day, well below the average increase of 555,000 bpd in August-September and lower than analysts' expectations. This decision also marked the return of supply cuts previously expected to remain in place until the end of 2026.
In addition to the OPEC+ factor, the market is also focusing on the potential for new sanctions against Russia following its massive airstrikes in Ukraine. US President Donald Trump has said he is ready to move to a second phase of restrictions, while the European Union and the US are preparing coordinated measures. If implemented, Russian oil supplies to the global market could further reduce, supporting prices.
On the other hand, the chance of a Fed interest rate cut this month—with a nearly 90% probability—is seen as supporting future energy demand. However, analysts believe the threat of oversupply remains the main factor holding back oil price increases this year.
Source: Bloomberg
