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Oil extends gains after OPEC production increase
Oil prices rose at the settlement on Monday, September 8, recovering some of last week's losses after OPEC+ production increases were deemed modest and concerns over the possibility of further sanctions on Russian crude.
Brent crude rose 52 cents, or 0.79%, to settle at $66.02 a barrel.
West Texas Intermediate (WTI) crude rose 39 cents, or 0.63%, to settle at $62.26 a barrel.
Both benchmarks lost more than 2% on Friday, and have fallen more than 3% over the past week, weighed down by a weak US jobs report and the resulting downward pressure on energy demand prospects.
OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other allies, approved a gradual production increase starting in October. Eight members of the alliance are scheduled to raise their production by about 137,000 barrels per day, a level significantly lower than previous monthly increases of about 555,000 barrels in August and September and 411,000 barrels in July and June.
Also, the Algerian Energy Ministry said on Monday that Algeria and Russia affirmed their commitment to contributing to the stability of the oil and gas market within the OPEC+ alliance.
Toshitaka Tazawa, an analyst at Fujitomi Securities, said the market has witnessed a "slight recovery" supported by relief over the limited increase in OPEC+ production and technical factors after last week's declines. He added that expectations of tighter supply due to potential new US sanctions on Russia are supporting prices, although downward pressure continues with increased production.
In the geopolitical context, Russia launched its largest airstrike since the beginning of the war on Ukraine, setting fire to the main government building in central Kyiv and killing at least four people, including an infant, according to Ukrainian officials.
In Washington, US President Donald Trump said that European leaders would visit the United States on Monday and Tuesday to discuss ways to end the Russian-Ukrainian war. He added that he was "not satisfied" with the current situation but reiterated his confidence that a settlement could be reached soon.
