Opec+ on Sunday agreed to another output increase for December as the supergroup of oil producers led by Saudi Arabia and Russia continues to bring more barrels into the market. The eight Opec+ countries also agreed to pause the oil output increases for the first quarter of 2026.
The group, which also includes Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman, decided to raise production by 137,000 barrels per day for next month, similar to October and November levels of increase, Opec+ said in a statement on Sunday.
The move was in light of a "steady global economic outlook and currently healthy market fundamentals, as reflected in low oil inventories," according to the statement.
The group decided to pause in production increments in January, February and March due to seasonality.
However, the rate of 1.65 million barrels per day "may be returned in part or in full subject to evolving market conditions and in a gradual manner," it said.
The eight countries will meet on November 30.
This will be the ninth consecutive month that Opec+ is boosting production as it focuses on regaining market share and supporting the growth of its economies.
In September, it completed the unwinding of 2.2 million bpd of cuts that were first announced in November 2023 and implemented starting in April this year.
The group is currently unwinding 1.65 million bpd of voluntary cuts announced in April 2023. For the month of October and November, the group approved adding about 137,000 bpd for each month.
The group will meet next on November 30 to review market conditions and decide future production policy.
Oil markets have remained volatile this year amid geopolitical tensions in the Middle East and tariffs announced by the US President Donald Trump.
US decision to announce sanctions on Russian oil companies Lukoil and Rosneft and Federal Reserve's decision to cut interest rates also impacted oil markets.
Oil prices jumped as much as 5 per cent on US sanctions on Russian oil companies last month as a result of supply concerns in the market from one of the largest producers of oil in the world.
The Fed lowered its benchmark rate by 25 basis points on Wednesday after lowering interest rates by similar levels in September, that led oil prices to trade higher.
Lowering interest rates usually supports oil prices as borrowing becomes less expensive for businesses to spend on business growth that in turn stimulates economic growth that pushes demand for oil higher.
“Investors interpreted the policy shift as supportive for short- and medium-term demand and global growth sentiment,” Claudio Galimberti, chief economist and global market analysis director at Rystad Energy, said.
“The Fed’s decision underscores a broader turn in its policy cycle – one that favours gradual reflation and support over restraint, providing a tailwind to commodities sensitive to economic activity.”
However, over supply concerns and weak demand continued to affect oil markets.
Brent crude oil prices are forecast to fall from an average of $68 in 2025 to $60 in 2026 – a five-year low, the World Bank said in a report last month, citing stagnation of oil consumption in China and a rise in demand for electric vehicles.
Brent, the benchmark for two-thirds of global crude oil, settled 0.62 per cent higher at $64.77 a barrel when markets closed on Friday. West Texas Intermediate, the US gauge for crude, was up 0.68 per cent to close at $60.98 a barrel.
