WASHINGTON (dpa-AFX) - Crude oil moved higher on Monday, regaining ground following last week's loss as the OPEC+ alliance's decision yesterday to increase output was countered by the threat of sanctions hanging over Russia on its oil exports.
WTI Crude Oil for October delivery was last seen trading up by $0.53 (or 0.86%) at $62.40 per barrel.
Yesterday, OPEC+ (Organization of the Petroleum Exporting Countries, plus Russia and other allies) agreed to increase production by 137,000 barrels per day beginning in October. The alliance has been increasing production since April.
Earlier reports indicating steep increases, raising concerns of oversupply, were proven wrong with these modest numbers. In addition, Sunday's output hike decision was already priced in with last week's oil price retreat, leading to a reduced impact today.
The group had increased about 555,000 bpd for September and August, and 411,000 bpd in July and June.
On the geopolitical front, weeks before, US President Donald Trump attempted to bring the leaders of Russia and Ukraine to the negotiating table in an effort to end the war between the two countries. However, obstinate Russia did not cooperate and has continued its attacks on Ukraine.
Yesterday, Russia attacked Ukraine with at least 810 drones and 13 missiles, killing four. Reacting to the news, Trump has indicated that he is moving to the 'second phase of punishing' Russia.
It is notable that Trump has not yet followed through on his earlier threat against Russia so far even though he punished India - a major Russian oil purchaser - with 25% 'penalty tariffs.'
The prospect of sanctions on Russia has countered the OPEC+ cartel's planned increase in output.
On the demand side, market consensus is that the demand will slow down in the fourth 2025.
If demand tapers and supply rises, analysts predict oil prices could fall below $60 per barrel by the end of 2025 and potentially into the mid-$50s in 2026.
The world's top crude importer China has been continuing stockpiling. The country's July crude oil imports rose 11.5% from the same month a year ago
Recent data from the International Energy Agency's September 2025 Oil Market Report indicated that global oil demand was expected to increase by approximately 2.1 million barrels per day in 2025
In the US, last week's nonfarm payrolls data showed that unemployment rate rose to 4.3% while job growth was restricted to 22,000, far below the expected 75,000, subtly revealing a slowdown of the labor market. The total number of unemployed now stands at 7.4 million.
The US Fed is faced with a new dilemma. A rate cut could help jobs but trigger inflation, while holding rates at the current level could worsen the slowdown.
However, traders are anticipating with more certainty a 25-basis-point rate cut in Fed's upcoming meeting next week.
Oil price movement would depend upon the Fed's decision as it affects the US dollar and consequently oil prices since oil is a dollar-denominated commodity.
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