Oil prices rise after OPEC+ output increase falls short of expectations

Oil prices are edging higher at the start of this week after the OPEC cartel and its allies led by Russia, collectively known as OPEC+, announced plans to increase oil production by less from November than expected. However, analysts believe that the price rise will be short-lived and that a continuation of last week's price decline is more likely.

The price of Brent crude has moved back above USD 65/bbl after falling below that threshold last week for the first time in more than three months. The main reason for the price increase is OPEC+'s decision to raise production by 137 thousand bpd from November, while figures as high as 500 thousand bpd had previously been discussed, as well as Saudi Arabia's efforts to regain a larger market share. Russia, however, which benefits from higher oil prices, pushed through a smaller production increase.

“The market had expected a somewhat larger increase from OPEC+, as last week's survey showed. However, even 137,000 barrels per day further swells the already oversupplied balance for the fourth quarter of 2025 and for 2026,” said Rystad analyst Janiv Shah.

In the short term, analysts believe that the refinery maintenance season, which is set to begin soon in the Middle East, limits further potential price gains. Expectations of weaker demand in the fourth quarter are also another strong factor limiting the market's upside potential.

“If we see more consistent production growth, then the decline in oil prices could be sustained. However, much now depends on whether, and at what pace, the US economy can grow for the rest of 2025 and in 2026, which would significantly support demand,” said Chris Beauchamp, chief market analyst at IG Group.

Analysts also note increasingly frequent Ukrainian attacks on Russian energy infrastructure. The US, led by President Donald Trump, has made no secret of the fact that this is an effort to reduce Russia's revenue from energy commodity exports in order to limit its ability to finance its aggression in Ukraine. The US is to provide Ukraine with intelligence for this purpose.