Oil prices rose over 2% on Monday, November 4, following an OPEC+ decision to postpone a planned production increase by one month. This decision, announced on Sunday November 3, coincides with heightened market sensitivity as the U.S. presidential election approaches.
By 0921 GMT, Brent crude futures were up by $1.81 (2.5%), trading at $74.91 per barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.86 (2.7%) to $71.35 per barrel.
OPEC+, consisting of OPEC members, Russia, and other allied nations, announced it would extend its 2.2 million barrels per day output cuts by an additional month past December. The group had originally planned to increase production in October but delayed due to low prices and weakening demand. OPEC+ was set to raise output by 180,000 barrels per day in December.
UBS analyst Giovanni Stanovo suggested that OPEC+ is seeking more clarity on global economic trends, including the effects of lower U.S. interest rates and policy easing in China. Stanovo added that the group is also closely watching the U.S. election outcome and how it might influence oil markets, especially regarding adjustments needed to offset past production quota breaches.
While OPEC+ planned to phase out its 2.2 million barrels per day voluntary cuts by gradually increasing production from December 2024, the core 3.66 million barrels per day cut will remain in place until the end of 2025.
Oil prices saw a decline last week, with Brent and WTI losing about 4% and 3%, respectively, largely due to record U.S. output. However, prices rebounded on Friday amid reports of potential Iranian retaliation against Israel.