Oil on the upswing after new Opec+ production increase postponed
Brent crude rebounded by more than 2% and returned to trade around $75 per barrel, although the market expected the decision and remains sceptical about its impact
3' min read
3' min read
Oil is recovering after Opec+'s decision to postpone the production increase by a further month. The announcement, which came on the afternoon of Sunday 3, cannot be considered a real surprise: many had predicted that the Organisation would have preferred to take more time, given the market conditions - which remain very weak from a fundamentals perspective - and while waiting to know the outcome of the US presidential elections, which could change the scenarios also on the energy policy front.
The price of a barrel, however, rebounded by more than 2% right from the start of the session on Monday 4, bringing Brent crude for January back around the psychological threshold of 75 dollars, while the Wti delivered in December was back above 71 dollars, also helped by renewed fears of escalation in the Middle East raised by Iranian threats: on Saturday 2, Ayatollah Ali Khamenei promised 'devastating retaliation' against Israel.
Opec+, whose next summit is scheduled for 1 December, merely issued a meagre communiqué to inform about the change of schedule on production policies: the voluntary cuts made by eight countries, it says, will be kept in place 'until the end of December 2024', thus for one month longer than previously indicated.
The note, which does not give reasons, refers to the additional 2.2 million barrels per day tightening that Saudi Arabia and Russia, together with the United Arab Emirates, Iraq, Kuwait, Kazakhstan, Algeria and Oman, had taken on in 2023.
Last June, a timetable had been set for the phasing out of these cuts, with the 'payback' of 180,000 barrels per day each month due to start in October. The start had then been postponed to December and is now slipping again, to January 2025.
