Oil Prices Rise on Modest OPEC+ Output Hike and Russia Supply Concerns

PUKMEDIA

Oil prices.

Oil prices rose on Tuesday after OPEC+ announced a smaller-than-expected increase in production, while concerns over tighter supply due to the prospect of fresh sanctions on Russia provided further support.

Brent crude was up 35 cents, or 0.53%, at $66.37 a barrel by 03:35 GMT, while U.S. West Texas Intermediate crude gained 32 cents, or 0.51%, to $62.58 a barrel.

Eight members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed on Sunday to raise production from October by 137,000 barrels per day (bpd). This is significantly below the monthly increases of about 555,000 bpd in September and August, and 411,000 bpd in July and June. It also fell short of market expectations.

Haitong Securities noted that, given the faster OPEC+ output increases earlier this year and demand continuing to fall short of projections, the threat of an oversupply remains the main factor influencing prices in 2025.

Prices were further supported by speculation of tougher sanctions on Russia, following the country’s largest air strike on Ukraine which set fire to a government building in Kyiv. U.S. President Donald Trump said he was ready to move to a “second phase” of restrictions.

Meanwhile, the European Union’s top sanctions official met U.S. counterparts in Washington with a team of experts to discuss the first coordinated transatlantic measures against Russia since Trump returned to office.

Additional sanctions on Russia would reduce its oil exports to global markets, likely supporting higher crude prices.

Attention also turns to the U.S. Federal Reserve, whose Federal Open Market Committee meets next week. Traders currently see an 89.4% chance of a quarter-point interest rate cut. Lower rates ease borrowing costs, potentially boosting economic growth and driving up oil demand.



PUKMEDIA