Oil prices experienced an increase of approximately 1% in early trading on Monday, following OPEC+’s announcement of a more restrained monthly production increase than anticipated, which alleviated certain apprehensions regarding supply enhancements. Brent crude futures increased by 63 cents, representing a 1% rise, reaching $65.16 a barrel by 2310. Meanwhile, U.S. West Texas Intermediate crude stood at $61.46, up 58 cents, also reflecting a 1% gain.

“The price jump has primarily been boosted by OPEC+’s decision for a lower-than-expected production hike next month as the group intended to buffer the recent slump in oil markets,” stated analyst Tina Teng. “However, crude prices are expected to stay subdued in light of the bleak global economic outlook,” she added. On Sunday, the Organization of the Petroleum Exporting Countries plus Russia and some smaller producers announced an increase in production from November by 137,000 barrels per day (bpd), maintaining the same modest monthly increase as in October, in light of ongoing concerns regarding a potential supply glut.

In the lead-up to the meeting, sources indicated that Russia was pushing for an output increase of 137,000 bpd to mitigate price pressures, whereas Saudi Arabia was inclined towards a significantly larger increment, potentially double, triple, or even quadruple that amount, in order to expedite the recovery of its market share. “OPEC+’s decision to increase production by another 137,000 bpd in November could be manageable in light of rising supply disruptions due to tightening sanctions by the U.S. and Europe against Russia and Iran,” analysts noted on Monday. “Meanwhile, Ukraine continued to intensify its attacks on Russian energy facilities, targeting the Kirishi refinery, one of Russia’s largest refineries, with an annual processing capacity exceeding 20 million tonnes,” the analysts noted.

Last week, finance ministers from the Group of Seven nations announced their intention to intensify pressure on Russia. This will involve targeting entities that persist in purchasing Russian oil and those aiding in the circumvention of sanctions, all aimed at reducing Russian revenues in response to Moscow’s invasion of Ukraine.