Oil prices rise by over $1 as OPEC+ delays output hike

The market faces a busy week with the US presidential election and an important meeting in China.

By 07:22 GMT, Brent crude rose by $1.39, or 1.9 percent, reaching $74.49 per barrel, while US West Texas Intermediate (WTI) crude increased by $1.41, or 2.0 percent, to $70.90 per barrel, according to Reuters.

On Sunday (Nov. 3), OPEC+—comprising the Organization of the Petroleum Exporting Countries, Russia, and other allies—announced it would maintain its production cut of 2.2 million barrels per day (bpd) through December, delaying a previously scheduled output increase intended for October due to declining prices and weak demand, as per reports.

The OPEC+ had initially planned to boost production by 180,000 bpd starting in December.

Although delaying the hike does not fundamentally shift market dynamics, it may prompt traders to reassess OPEC+'s strategy, according to analysts from ING. 

Some market participants had expected the group to proceed with the planned production increase, ING analysts noted, suggesting OPEC+ may be more committed to supporting prices than previously thought.

OPEC+ plans to gradually ease the 2.2-million-bpd production cut over the coming months, with an additional 3.66 million bpd in cuts remaining until the end of 2025, Reuters reported.

Last week, Brent and WTI posted weekly losses of around 4 percent and 3 percent, respectively, as record US output weighed on prices. 

However, both benchmarks saw slight gains on Friday amid reports that Iran might retaliate against Israel soon.

On Thursday, US news outlet Axios reported that Israeli intelligence had information suggesting Iran might plan an attack on Israel from Iraq within days, based on anonymous Israeli sources.

IG market strategist Yeap Jun Rong questioned whether the current upward trend in oil prices would hold, noting that past price jumps due to delayed output hikes and geopolitical tensions had often been short-lived, as reported by Reuters.

Rong anticipates that prices may remain within a broad range, with resistance near $78.50, according to Reuters.

Looking ahead, markets are closely watching Tuesday's US presidential election, with polls showing a close race between Vice President Kamala Harris and former President Donald Trump.

Meanwhile, the US Federal Reserve is expected to announce a 25-basis-point rate cut on Thursday.

In China, the National People's Congress Standing Committee will meet from Monday through Friday and is likely to introduce new economic stimulus measures, mainly to reduce local government debt, Reuters reported, citing analysts.