Oil prices edge higher as OPEC+ slows output hike

SINGAPORE: Oil prices inched up in early Asian trade on Monday, recovering some ground after last week’s sharp losses, as OPEC+ agreed to ease production at a slower pace starting in October amid worries about weakening global demand.

Modest rebound after heavy losses

Brent crude rose 34 cents, or 0.5 percent, to $65.84 a barrel by 0047 GMT, while US West Texas Intermediate (WTI) gained 30 cents, also 0.5 percent, to $62.17.

The move offered some relief after both benchmarks slid more than 2 percent on Friday, dragged down by a disappointing US jobs report that clouded the outlook for energy demand. Over the week, oil had already shed more than 3 percent.

The rebound comes as traders weigh OPEC+’s weekend decision to scale back the pace of its supply hikes. The group, which includes the Organisation of the Petroleum Exporting Countries, Russia, and other allies, will increase production from October by 137,000 barrels per day.

That is far below the 555,000 bpd rises approved for September and August, or the 411,000 bpd additions seen in July and June.

Analysts said the smaller hike reflects a balancing act between Saudi Arabia’s push to regain market share and concerns over a possible glut in the winter months.

Analysts cautious on outlook

“The oil market rebounded slightly, supported by relief over OPEC+’s modest output hike and a technical bounce following last week’s decline,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.

He added that expectations of tighter supply from potential new US sanctions on Russia are also offering support, although the pressure of rising supply is expected to linger.

Geopolitical tensions add uncertainty

The OPEC+ decision unfolded against a tense geopolitical backdrop. On Sunday, Russia launched its largest air assault of the war on Ukraine, igniting Kyiv’s main government building and killing at least four people, including an infant, according to Ukrainian officials.

US President Donald Trump said European leaders would visit Washington on Monday and Tuesday to discuss ways to end the conflict. He told reporters he was “not happy” about the state of the war but insisted he remained confident it would be resolved soon.

Meanwhile, the European Union’s energy chief reiterated that the bloc would phase out Russian oil imports by 2028, saying on Friday that no pressure had come from Washington to bring the deadline forward.

With markets now weighing a cautious OPEC+ supply strategy alongside persistent geopolitical risks, traders say oil prices could remain volatile in the weeks ahead.

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