FX.co ★ Oil Rises After OPEC+ Slows Output Increases

West Texas Intermediate (WTI) crude oil futures climbed to $62.1 per barrel on Monday, reversing a three-day downturn. This uptick followed the decision by OPEC+ to incrementally boost oil production, albeit at a conservative rate, given the tepid outlook for demand. Announced on Sunday, the group will enhance production by 137,000 barrels per day (bpd) starting in October. This increase is notably smaller than the prior monthly increments of approximately 555,000 bpd in August and September, and 411,000 bpd in June and July. This strategic move underscores Saudi Arabia's plan to recapture market share while exercising caution amidst looming global economic challenges likely to impact consumption. Additionally, the October production increase initiates the unwinding of a second phase of cuts amounting to 1.65 million bpd, over a year ahead of its initial timeline. This comes after having fully unwound the first phase of reductions totaling 2.5 million bpd since April, which corresponds to about 2.4% of the global demand.