Baghdad: Oil prices rose by more than a dollar in early trading on Monday, after the OPEC+ group announced on Sunday that it would postpone the planned production increase in December for a month due to weak demand and increased supply from outside the group. Brent crude futures rose $1.21 per barrel, or 1.66%, to $74.31 per barrel by Monday morning. US West Texas Intermediate crude also rose $1.23, or 1.77%, to $70.72 per barrel.

According to National Iraqi News Agency, OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other allies, was scheduled to raise production in December by 180,000 barrels per day. This means that the group will extend its cut of 2.2 million barrels per day for another month, following a previous postponement from October due to low prices and declining demand.

‘The delay until January does not significantly change the fundamentals but may leave the market forced to rethink OPEC+ strategy,’ ING analysts noted. The decision to delay the p
roduction increase went against expectations among some in the market that OPEC+ would proceed with the planned production increase.

The analysts further commented, ‘The delay in the production increase suggests that the group may be more willing to support prices than many believe.’ Before the decision to delay, the eight OPEC+ members were expected to start gradually unwinding their additional voluntary production cuts of 2.2 million barrels per day by increasing output in December 2024 and over subsequent months next year.

OPEC+’s remaining cuts of 3.66 million bpd will remain in place until the end of 2025, as agreed in June. OPEC+ ministers are due to meet on Dec. 1 to set production policy for 2025.