Oil rises 1% after OPEC+ hikes output less than expected
Oil prices rose more than 1% on Monday after OPEC+'s planned production increase for November was more modest than expected, tempering some concerns about supply additions, though a soft outlook for demand is likely to cap near-term gains.
Brent crude futures climbed 80 cents, or 1.2%, to $65.33 a barrel by 0808 GMT, while U.S. West Texas Intermediate crude was at $61.64, up 76 cents, or about 1.3%.
On Sunday, the Organization of the Petroleum Exporting Countries plus Russia and some smaller producers said it would raise production from November by 137,000 barrels per day (bpd), matching October's figure, amid persistent concern over a looming supply glut.
In the run-up to the meeting, sources said although Russia was advocating for an increase of 137,000 bpd to avoid pressuring prices, Saudi Arabia would have preferred double, triple or even four times that to quickly regain market share.
The modest production update also comes at a time of rising Venezuelan exports, the resumption of Kurdish oil flows via Turkey, and the presence of unsold Middle Eastern barrels for November loading, PVM Oil Associates analyst Tamas Varga said.
Saudi Arabia kept unchanged the official selling price for the Arab Light crude it sells to Asia.
While refining sources in Asia surveyed by Reuters had expected a slight increase, those expectations diminished as concerns about rising Middle Eastern crude supply felled the premium to a 22-month low last week.
In the near term, some analysts expect the refinery maintenance season starting soon in the Middle East to also help cap prices.
Rystad's Shah added that Chinese stockpiling of oil, along with the geopolitical risk premiums and inefficient trade routes and sanctions, were also supporting the benchmarks.
Expectations of weak demand fundamentals in the fourth quarter are another factor limiting the market's upside.
Source : Reuters.com
