KEY POINTS
- Brent and WTI crude remain flat despite OPEC+’s decision to halt supply hikes in early 2026.
- Weak Asian factory data and record U.S. output weigh on market sentiment.
- Russia’s Tuapse port hit by a Ukrainian drone strike, fuelling supply concerns.
Crude oil prices remained broadly unchanged on Monday even after OPEC+ announced plans to slow its production growth, with traders balancing concerns over a potential surplus against fresh geopolitical disruptions.
Brent crude slipped just one cent to $64.76 a barrel by mid-morning in London, while U.S. West Texas Intermediate fell three cents to $60.95. The muted reaction came as investors digested signs of weakening demand across Asia and record output in the United States.
The Organisation of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, said over the weekend that they would raise supply slightly by 137,000 barrels per day in December but pause increases through the first quarter of next year. The move follows three consecutive months of price declines, with Brent and WTI both losing more than 2% in October and touching five-month lows on 20 October.
OPEC+ Balances Policy amid Oversupply Risks
Warren Patterson, head of commodities research at ING, said the decision was a recognition of the “large surplus” expected early next year. “There’s still plenty of uncertainty over how severe that surplus will be, depending on how U.S. sanctions affect Russian oil flows,” he said.
Analysts said Russia’s position in global oil supply remains a wild card. The country’s energy sector continues to face pressure from both Western sanctions and the ongoing conflict in Ukraine. A Ukrainian drone strike on Sunday targeted Tuapse, one of Russia’s key Black Sea oil ports, setting off a fire and damaging a vessel.
Helima Croft, head of commodities strategy at RBC Capital, noted that attacks on Russian infrastructure, coupled with restrictions on companies such as Rosneft and Lukoil, could tighten supply even as OPEC+ seeks stability.
A Reuters poll showed most analysts keeping their oil price forecasts steady, seeing any upside capped by sluggish demand and rising production elsewhere. Estimates of a potential oil surplus range from 190,000 to 3 million barrels per day.
In the U.S., the Energy Information Administration reported record crude production of 13.8 million barrels per day in August, a sign that American output continues to offset OPEC+ efforts to manage the market.
Meanwhile, business surveys revealed ongoing weakness in Asia’s manufacturing hubs, particularly in China and South Korea, dampening optimism over future fuel consumption. Asia remains the world’s largest oil-consuming region, and slowing factory activity there adds another layer of uncertainty to the outlook.
As OPEC+ prepares to pause its production growth in early 2026, traders are watching whether demand can recover fast enough to absorb the surplus or if the market’s current calm is only a prelude to fresh volatility.
