Oil gains more than $1 after OPEC+ delays output hike
ShafaqNews/ Oil prices extended gains onMonday, rising more than $1 on a decision by OPEC+ to delay by a month plans toincrease output, while the market braced for a week that spans a U.S.presidential election and a key meeting in China.
Brentfutures rose by $1.18 per barrel, or 1.61%, to stand at $74.28 a barrel by 0402GMT. U.S. West Texas Intermediate (WTI) crude rose by $1.21 a barrel, or 1.74%,to stand at $70.70.
On Sunday,OPEC+, which includes the Organization of the Petroleum Exporting Countriesplus Russia and other allies, said it would extend its output cut of 2.2million barrels per day (bpd) for another month in December, with an increasealready delayed from October because of falling prices and weak demand.
The groupinghad been due to increase output by 180,000 bpd from December.
"Whilethe delay until January does not change fundamentals significantly, it doespotentially leave the market having to rethink the strategy of OPEC+," INGanalysts said in a note.
The delaybucked the expectations of some in the market for OPEC+ to deliver the plannedhike in output, they added.
"Thisdelayed supply increase means that maybe the group are more willing to supportprices than many believe," they said.
The group isset to gradually unwind the 2.2-million-bpd cut over the coming months, whileanother 3.66 million bpd of production cuts will stay until the end of 2025.
Brent andWTI posted weekly declines last week of about 4% and 3%, respectively, asrecord U.S. output weighed on prices. But both contracts edged up on Friday onreports that Iran could launch a retaliatory strike on Israel within days.
On Thursday,U.S. news website Axios said Israeli intelligence suggested that Iran waspreparing to attack Israel from Iraq within days, citing two unidentifiedIsraeli sources.
It isquestionable whether the price uptrend will be sustained as previous initialpositive reaction to the delayed output hike and geopolitical tension haveeventually fizzled off, said Yeap Jun Rong, a market strategist at IG.
For now, oilprices may stay in a broad consolidation range, with any upside likely to findsome resistance at the level of $78.50, he added.
Marketsawait Tuesday's U.S. presidential election, with polls showing Democratic VicePresident Kamala Harris and Republican former President Donald Trumpneck-and-neck.
And onThursday, economists expect the U.S. Federal Reserve to cut interest rates by25 basis points.
In China,the Standing Committee of the National People's Congress meets from Monday toFriday and is expected to approve additional stimulus to boost the slowingeconomy, though analysts say the bulk may go to help cut local government debt.
(Reuters)
