Global oil prices surge by $1 as OPEC+ delays increase in production

WEB DESK: Oil prices jumped by over $1 on Monday morning after OPEC+’s decision to delay a planned output increase.

OPEC+ announced a day earlier that it would postpone increase in production by a month due to weak demand and increasing supplies from outside the group.

Brent crude by 0121 GMT had risen by $1.18 to $74.28 per barrel. US West Texas Intermediate (WTI) crude increased by $1.20 to $70.69 per barrel.

OPEC+ previously planned to raise output by 180,000 barrels per day (bpd) in December.

This latest delay means the existing production cut of 2.2 million bpd will now continue for another month.

The initial increase was postponed from October due to declining prices and sluggish demand.

Analysts said that the one-month delay may not drastically alter market fundamentals but it could prompt a reassessment of OPEC+ strategy.

Some market participants had expected the group to proceed with the planned output increase making this decision surprising.

ING analysts added that this move suggests OPEC+ may be more willing to support oil prices than previously thought.

OPEC+ is set to gradually ease its 2.2 million bpd production cut with additional reductions of 3.66 million bpd remaining in place until the end of 2025.

Last week, both Brent and WTI recorded declines of around 4 per cent and 3 per cent, respectively, as record-high US oil output weighed on prices.

However, prices edged up on Friday following reports that Iran could retaliate against Israel within days.

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