Oil rose nearly 2% after an unexpectedly modest OPEC+ decision. What's next?

Oil prices rose by almost 2% in trading on October 6 - after the decision of OPEC+ to increase production, but in a smaller volume than the market expected. It took the news as a signal of stability and reduction of risks of oversupply, notes Reuters. However, analysts warn: with weak demand, the potential for further growth of quotations is limited.

Oil prices rose on Monday after the planned OPEC+ production increase for November turned out to be more modest than expected, writes Reuters. The organization agreed to raise production from November by 137,000 bpd - the same amount by which it increased in October. This partially reduced fears of supply growth, although the weak demand outlook is likely to limit short-term price growth, the agency notes.

Brent crude futures rose by 1.9% to $65.8 per barrel, according to data from the Intercontinental Exchange. U.S. West Texas Intermediate crude was up 2% to $62.12 per barrel.

"The market was expecting a slightly higher production increase from OPEC+, judging by the structure of the data last week. However, the modest increase of 137,000 bpd only adds to the already existing oversupply in the market in the fourth quarter of 2025 and into 2026," said Rystad analyst Yanniv Shah.

According to the agency's sources, ahead of the meeting Russia was in favor of increasing production by 137,000 bpd in order not to put pressure on prices, while Saudi Arabia would prefer a two-, three- or even four-fold increase in order to regain market share more quickly.

The modest update on production coincided with higher exports from Venezuela, the resumption of Kurdish oil shipments via Turkey and the emergence of unsold Middle East shipments loaded for November, said PVM Oil Associates analyst Tamas Varga.

Saudi Arabia left unchanged the official selling price of Arab Light for Asian buyers. Reuters sources in Asian refineries expected the kingdom to slightly raise the Arab Light price. But fears of a supply glut from the Middle East lowered those expectations and the premium fell to its lowest in 22 months.

Some analysts expect the near-term refinery maintenance season, which is about to start in the Middle East, to help limit prices, Reuters writes.

Rystad's Shah added that China's accumulation of oil inventories, as well as geopolitical risks, inefficient trade routes and sanctions are also supporting benchmark prices. Expectations of weak demand in the fourth quarter are becoming another factor limiting market growth, Reuters noted.

"In the absence of new bullish drivers and amid growing uncertainty in the demand outlook, oil prices are likely to remain under pressure despite a smaller-than-expected production increase from OPEC+," said Priyanka Sachdeva, senior analyst at Phillip Nova.

"At the same time, Ukraine continues to step up its attacks on Russian energy facilities, targeting the Kirishi oil refinery, one of Russia's largest, with an annual refining capacity of over 20 million tons," ANZ analysts added.

This article was AI-translated and verified by a human editor