Oil Rises After OPEC+ Hikes Output Less Than Expected

• Oil prices rose by about $1 on Monday after OPEC+'s planned production increase for November was more modest than expected, tempering some concerns about supply additions, though a soft outlook for demand is likely to cap near-term gains. Brent crude futures climbed $1.07, or 1.66%, to $65.60 a barrel, while U.S. West Texas Intermediate crude was at $61.84, up 96 cents, or 1.58%.
• "The market feels that the actual amount of oil that is going to hit the market is far less than what they announced, given that some of the OPEC+ members are already producing at capacity," said Andrew Lipow, president of Lipow Oil Associates
• The Organisation of the Petroleum Exporting Countries, plus Russia and some smaller producers, recently said it would raise production from November by 137,000 barrels per day (bpd), matching October's figure, amid persistent concern over a looming supply glut.
• Sources said that although Russia was advocating for an increase of 137,000 bpd to avoid pressuring prices, Saudi Arabia would have preferred double, triple, or even four times that to quickly regain market share. The modest production update also comes at a time of rising Venezuelan exports, the resumption of Kurdish oil flows via Turkey, and the presence of unsold Middle Eastern barrels for November loading, PVM Oil Associates analyst Tamas Varga highlighted.
• While refining sources in Asia surveyed by Reuters had expected a slight increase, those expectations diminished as concerns about rising Middle Eastern crude supply felled the premium to a 22-month low last week. In the near term, some analysts expect the refinery maintenance season starting soon in the Middle East will help cap prices. The Kirishi oil refinery, one of Russia's largest, halted its most productive crude unit following a drone attack and subsequent fire on October 4, with its recovery expected to take about a month, two industry sources said.
• Expectations of weak demand fundamentals in the fourth quarter are another factor limiting the market's upside. U.S. crude oil, gasoline, and distillate inventories rose more than expected in the week ended September 26 as refining activity and demand softened, the Energy Information Administration said last week.

(Source: Reuters)