Oil prices climbed for a second consecutive session on Tuesday after OPEC+ announced a smaller than expected production increase for November, easing investor concerns over a potential supply glut.
The restrained output decision suggests the coalition remains wary of oversupplying the global market amid mixed economic signals and ongoing geopolitical tensions.
By 0623 GMT, Brent crude futures rose 19 cents, or 0.29 percent, to $65.66 a barrel, while US West Texas Intermediate gained 19 cents, or 0.31 percent, to $61.88. Both benchmarks settled more than one percent higher in the previous session, reversing part of last week’s losses.
The Organization of the Petroleum Exporting Countries and allies, including Russia collectively known as OPEC+ agreed to raise output by 137,000 barrels per day beginning in November.
The figure came in below market forecasts, which anticipated a more aggressive increase amid projections of softening demand in late 2025.
Analysts viewed the move as a sign of restraint. The alliance has added over 2.7 million bpd in production targets this year, equivalent to roughly 2.5 percent of global demand.
Despite that, OPEC+ has maintained a cautious stance, mindful of potential economic headwinds and lingering uncertainties surrounding global energy consumption.
“The decision underscores OPEC+’s focus on stability rather than expansion,” said Maria Lopez, an energy strategist at PetroView Analytics. “They’re signaling they don’t want to flood the market at a time when inventories could rise and demand growth appears uneven.”
Market analysts said the modest output hike could help restore balance after Brent crude’s five dollar drop last week, which was triggered by speculation of a larger supply boost.
“Brent had fallen by around $5 per barrel last week in response to earlier expectations of a larger supply boost, so this mild rebound seems reasonable,” said Anh Pham, senior analyst at LSEG.
For now, the market still appears capable of absorbing the additional barrels, and we haven’t yet seen a shift into contango at the front of the curve.
A contango where near term prices fall below future contracts often signals oversupply. The absence of such a structure suggests traders still see relatively tight conditions in the short term.
However, some analysts cautioned that rising production from both OPEC+ and non OPEC producers, coupled with sluggish economic growth, could pressure prices later this year.
“While today’s market is stable, the risk of a surplus remains,” said James Turner, chief economist at Global Energy Insight. “If demand weakens, especially due to trade tensions or slower manufacturing, the current output levels could quickly lead to excess supply.”
OPEC+’s total output increases this year now exceed 2.7 million bpd, according to industry data, with key contributors including Saudi Arabia, Russia, and the United Arab Emirates.
The group’s latest adjustment is modest compared with previous hikes, reflecting a more measured approach as the year closes. Despite higher production, geopolitical factors continue to underpin prices.
The ongoing conflict between Russia and Ukraine has disrupted trade routes and energy flows, injecting volatility into markets. On Monday, two industry sources confirmed that Russia’s Kirishi refinery halted operations at its most productive distillation unit, CDU-6, after a drone attack and subsequent fire on October 4.
Repairs could take up to a month, potentially tightening regional supply. Still, global output remains on an upward trajectory. US shale producers and Brazilian offshore operators have both increased production, while Iranian exports have quietly risen despite sanctions.
These developments, paired with softening economic indicators, could complicate OPEC+’s efforts to stabilize prices. Traders and industry participants expressed mixed views about the latest decision.
“At least they didn’t flood the market,” said Hassan Al Fadhil, a crude trader based in Dubai. “A larger hike would have sent prices spiraling down, but this cautious move gives everyone breathing room.”
In Houston, refinery worker Linda Martinez said steady oil prices are critical for job security. “When prices swing too much, projects get delayed or canceled. Right now, stability means we can keep operations running smoothly.”
Consumers, however, remain concerned about potential impacts on fuel costs. “Even a small bump in prices can hit household budgets,” said John Reynolds, a commuter in Chicago. “I just hope this doesn’t lead to higher gas prices before the holidays.”
Looking ahead, analysts are divided over the trajectory of oil prices. Some expect prices to hold near current levels if economic growth steadies, while others warn that slower demand could push Brent below $60 in coming months.
“Much will depend on the macroeconomic picture,” said Elaine Chen, head of commodities research at Blue Ridge Capital. “If global growth slows further and trade tensions persist, OPEC+ may be forced to reconsider its output strategy.”
Additionally, the U.S. Federal Reserve’s monetary policy and Chinese industrial activity remain key drivers of energy demand. Any signs of stimulus from Beijing or easing inflation pressures in the U.S. could bolster consumption and support prices.
Meanwhile, OPEC+ ministers are expected to convene again in December to review market conditions and adjust production if necessary.
Oil markets are showing resilience after OPEC+ opted for a smaller production increase, signaling the alliance’s caution amid uncertain economic and geopolitical conditions.
While current prices suggest balanced supply demand dynamics, potential demand weakness and growing output from other producers could reintroduce volatility in the months ahead.
For now, the group’s measured approach has helped stabilize sentiment, but the outlook remains contingent on broader economic trends and geopolitical developments.