Oil prices rise as OPEC+ agrees to slower pace of output hikes in Oct

Oil prices rose in Asian trade on Monday amid some optimism over tighter supplies after the OPEC+ production group agreed to raise production at a slower pace in October than prior months.

Oil prices recouped some measure of losses from last week, with heightened uncertainty over the Russia-Ukraine war also offering some support amid middling U.S. efforts to broker a ceasefire.

Brent oil futures for November rose 0.6% to $65.90 a barrel, while West Texas Intermediate crude futures rose 0.6% to $61.83 a barrel by 20:56 ET (00:56 GMT).

OPEC+ agrees to smaller output hike

The Organization of Petroleum Exporting Countries and allies, known as OPEC+, agreed to raise production in October, but at a substantially smaller pace than that seen earlier this year.

The producer group decided during a Sunday meeting it will raise output by a cumulative 137,000 barrels per day in October, much lower than monthly hikes of about 555,000 bpd and 411,000 bpd in earlier months.

The cartel’s latest hike comes after it began steadily raising production earlier this year, as leader Saudi Arabia sought to regain market share to offset deteriorating oil prices.

The cartel said on Sunday that it remained on guard over any further weakening in global demand, especially amid increased signs of cooling U.S. growth and sluggish trends in top importer China.

Oil markets face a potential supply glut in the northern hemisphere this winter, with U.S. fuel demand seen cooling after the end of the summer season.

Oil nurses losses on growth jitters

Brent and WTI futures lost between 3% and 4% last week, amid heightened concerns over slowing global demand.

A bulk of these losses came on Friday following dismal U.S. nonfarm payrolls data, which showed a sustained cooling in the world’s biggest economy.

While the data did ramp up bets on lower U.S. interest rates, which in turn hurt the dollar, it also raised concerns over weakening growth leading to softer fuel demand.

U.S. inventory data released last week had shown an unexpected build, with local fuel demand seen cooling with the end of the travel-heavy summer season.