Crude oil futures increased on Monday morning following OPEC+’s decision to postpone a planned production output increase by one month.
As of 9:54 AM, January Brent crude futures were priced at $74.31, a rise of 1.66%. December West Texas Intermediate (WTI) crude futures were trading at $70.72, up by 1.77%.
In India, November crude oil futures on the Multi Commodity Exchange (MCX) were at ₹5,955, down 0.55% from the previous close of ₹5,988. December futures also fell by 0.55%, trading at ₹5,933 compared to the previous close of ₹5,966.
According to a press release from the OPEC secretariat, eight OPEC+ countries—Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman—have agreed to extend the voluntary production adjustments of 2.2 million barrels per day from November 2023 through December 2024. This decision follows previous voluntary cuts announced in April and November 2023.
Warren Patterson, Head of Commodities Strategy at ING Think, and Ewa Manthey, Commodities Strategist, noted that oil prices strengthened as a result of this delay. The group had been set to gradually increase supply by about 180,000 barrels per day starting December 1.
“While the delay until January does not significantly alter market fundamentals, it may prompt a reassessment of OPEC+’s strategy,” they said. Reports indicated that Saudi Arabia was concerned about losing market share and was dissatisfied with compliance from some members. This backdrop had led to speculation that the group might continue with planned supply increases, despite recent price declines.
The delayed increase suggests that OPEC+ may be more inclined to support prices than previously thought. “Our analysis indicates that the market will remain in surplus through 2025 unless OPEC+ maintains production cuts,” they added.
In addition, rising tensions in West Asia contributed to the increase in oil prices. Iran’s leader, Ayatollah Ali Khamenei, has threatened a strong response to Israel, raising concerns about potential disruptions in crude oil supply from the region. Iran is a significant crude oil producer.
Market participants are also closely watching the outcome of the upcoming U.S. presidential election. Recent polls show a tight race between Donald Trump and Kamala Harris, both of whom have pledged to boost domestic oil production if elected.
In related trading, November natural gas futures on MCX fell to ₹218.70, down 3.44% from the previous close of ₹226.50. On the National Commodities and Derivatives Exchange (NCDEX), December turmeric contracts traded at ₹12,636, down 1.25% from ₹12,796. November jeera futures were at ₹23,600, a decline of 1.73% from the previous close of ₹24,015.
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