- Oil declines as OPEC+ readies more production increases
- The WTI prompt-month contract fell $1.18 to $64.54/Bbl Monday morning (8:08 AM CT)
- Oil declined on signals that OPEC+ will hike production again in November, cooling last week’s rally
- Bloomberg reported the alliance is considering raising output by at least as much as the 137 MBbl/d increase planned for October
- Helima Croft at RBC Capital Markets said that since many producers outside Saudi Arabia have essentially reached their ceiling, future increases will fall short of the headline figure
- On new benchmarks, Saudi Arabia is expected to be cautious with incremental additions, as the kingdom is reluctant to act as a permanent guarantor at its own expense
- While the main market narrative has focused on oversupply, other risks are emerging
- Russia and Ukraine conflict has taken about 20 percent of Russia’s refining capacity offline, and a significant reduction in export capability could force output shut-ins
- Tensions between Iran and Israel may escalate, with a growing likelihood of further Israeli strikes on Iranian military and nuclear facilities as well as key personnel before year-end or early 2026
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