Oil prices saw a sharp surge on Monday after a group of top producers announced a delay in the planned production increase for December, citing recent price pressures due to weakened demand. OPEC+ also announced on Sunday that it would delay the planned increase of 180,000 barrels per day for at least a month. The organization had previously set a plan to ease production cuts, amounting to 2.2 million barrels per day, starting in December.
However, OPEC+’s intentions to raise production raised concerns about weakened prices, especially after the sharp declines seen in September, bringing prices close to their lowest levels in three years. The OPEC+ alliance has reduced production by nearly 6 million barrels per day over the past two years to support falling prices.
The economic slowdown in China—the world’s largest oil importer—has been one of the main factors pressuring the oil market. The sharp decline in China’s oil imports in recent months has further intensified concerns.
Oil prices also received additional support as the U.S. dollar weakened, coinciding with the upcoming U.S. presidential election. According to recent polls, the race between Donald Trump and Kamala Harris appears to be close. Both candidates have pledged to increase domestic oil production, which has already reached record levels of over 13 million barrels per day.
Additionally, attention this week is focused on the Chinese National People’s Congress meeting, where policymakers are expected to approve increased fiscal spending to boost economic growth. Reports suggest that the government may approve a stimulus package of up to $1.4 trillion over the coming years to support the Chinese economy.
On another note, the oil markets experienced significant declines, but prices rebounded on Friday following reports indicating a potential escalation in the region that could heighten geopolitical tensions.
