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Oil costs jump over 1% on postponed OPEC+ output hike

Oil costs increased by more than $ 1 in early trading on Monday after OPEC+ stated on Sunday it would delay a prepared December output hike by one month due to soft demand and increasing supply outside the group.

Brent futures increased by $1.18 per barrel, or 1.61%, to $ 74.28 a barrel by 0121 GMT. U.S. West Texas Intermediate (WTI). crude increased by $1.20 a barrel, or 1.73%, to $70.69.

OPEC+, which includes the Organization of the Petroleum. Exporting Countries plus Russia and other allies, was due to. boost output by 180,000 barrels each day (bpd) from December.

That implies the group will extend their 2.2 million bpd cut. for another month, after having currently postponed the boost. from October since of falling costs and weak demand.

While the delay until January does not change basics. considerably, it does potentially leave the market needing to. reconsider the strategy of OPEC+, ING analysts stated in a note. The. delay bucked the expectations of some in the market that OPEC+. would proceed with the scheduled output increase.

This postponed supply increase implies that possibly the group are. more happy to support rates than many think, the analysts. said.

The group is set to slowly loosen up the 2.2 million bpd cut. over the coming months, while another 3.66 million bpd of. production cuts will stay in place up until completion of 2025.

Brent and WTI posted weekly declines of about 4% and 3%,. respectively, last week as record U.S. output weighed on rates. But both contracts edged up on Friday on reports that Iran could. launch a retaliatory strike on Israel within days.

On Thursday, U.S. news site Axios reported that Israeli. intelligence suggested that Iran was preparing to attack Israel. from Iraq within days, mentioning two unknown Israeli sources.

This week, markets are awaiting the U.S. presidential. election on Tuesday, with surveys showing Democratic Vice. President Kamala Harris and Republican politician previous President Donald. Trump neck and neck.

And on Thursday, financial experts expect the U.S. Federal Reserve. to cut rates of interest by 25 basis points.

In China, the Standing Committee of the National People's. Congress satisfies from Nov. 4-8 and is expected to authorize. extra stimulus to increase the slowing economy, however. analysts say the majority of the funds might be utilized to help reduce regional. federal government financial obligation.

(source: Reuters)