Oil prices rose by around 1 per cent on Monday, following a modest production hike announced by OPEC+ for November. The announcement eased some concerns over potential supply surpluses, although soft demand expectations are likely to limit near-term gains.
Brent crude futures increased by 67 cents, or 1 per cent, to $65.20 a barrel by 12 noon, while US West Texas Intermediate (WTI) crude rose 66 cents, or 1.1 per cent, to $61.54 a barrel, reported Reuters. Market analysts attributed the jump largely to OPEC+’s decision to implement a smaller-than-anticipated production increase.
OPEC+ Production Plan
On Sunday, OPEC+, comprising the Organisation of the Petroleum Exporting Countries, Russia, and some smaller producers, announced a 137,000 barrels per day (bpd) increase in output for November, the same modest increment as in October. The decision reflects ongoing concerns about a looming supply glut.
Independent analyst Tina Teng said, “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.”
Reports indicated that Russia favoured a 137,000 bpd increase to avoid pressuring prices, whereas Saudi Arabia reportedly preferred a significantly higher rise to regain market share more rapidly.
Refinery Maintenance Season to Influence Supply
The upcoming refinery maintenance season in the Middle East is expected to cap oil prices in the near term. According to Sentosa Shipbrokers, “Higher-than-usual refinery maintenance across the Middle East in Q4 will leave more crude available for shipment, further contributing to the prospect of strong export volumes.”
Analysts at BMI added, “As the shoulder season progresses, a ramp-up in refinery maintenance should create a significant surplus, spurring a selloff in oil.” Similarly, refinery shutdowns in other regions could also limit crude intake.
Demand Outlook Limits Upside
Weak demand fundamentals for the fourth quarter are another factor restraining oil price gains. Priyanka Sachdeva, senior market analyst at Phillip Nova, explained, “With the absence of any fresh bullish catalysts and growing ambiguity on the demand outlook, oil prices are likely to stay capped despite OPEC+’s smaller-than-feared output hike.”
She further noted, “The reality is that the market is gradually shifting toward a phase of oversupply, with seasonal demand expected to taper off into winter and macro data offering little upside impulse.”
While the smaller-than-expected OPEC+ output increase provided short-term support for oil prices, the combination of refinery maintenance, seasonal demand patterns, and global economic uncertainties suggests that gains are likely to be limited. Traders will continue monitoring both supply adjustments and demand signals as the market heads into the final quarter of 2025.
