OPEC+ Decision Boosts Oil Prices Amid U.S. Election Anticipation

Oil prices rose by more than 2% today as OPEC+ announced it was delaying its planned production increase, while investors focused on the upcoming U.S. presidential election. Brent futures rose by $1.71 to reach $74.81 per barrel, while U.S. West Texas Intermediate (WTI) crude oil increased by $1.81 to $71.30.

OPEC+, consisting of Russia and other allies, decided on Sunday to extend its daily production cut of 2.2 million barrels for another month until December. This move comes as the group grapples with declining prices and weak demand, marking the second postponement since October. The consortium had initially planned to increase monthly production by 180,000 barrels starting in December.

UBS analyst Giovanni Staunovo indicated that OPEC+ is seeking greater certainty regarding the economic implications of the recent U.S. interest rate cuts and China's fiscal and monetary policy adjustments. Staunovo also added that the group is likely awaiting the results of the U.S. election and the impacts of compensatory cuts from countries that have previously exceeded production limits.

Speaking at an industry event in Abu Dhabi, Eni's CEO emphasized that OPEC+'s production cuts and attempts to reverse them have led to increased volatility in energy markets, negatively affecting new production investments.

Analysts anticipate a week of high volatility in oil prices, focusing on Iran's potential responses to recent Israeli attacks and the outcomes of the U.S. election. According to Axios, Israeli intelligence has warned of possible Iranian attacks from Iraq against Israel.

Helima Croft, head of global commodity strategy at RBC Capital Markets, noted that top advisors to President Donald Trump showed strong support for aggressive actions against Iranian nuclear facilities and for the reinstatement of strict sanctions. In contrast, a Harris-led administration would likely avoid escalating sanctions and aim to quickly end the conflict.