Crude Rises Incrementally As OPEC Halts Output Hike For Q1 2026

(RTTNews) - Crude oil prices has edged slightly higher on Monday as the Organization of the Petroleum Exporting Countries and its allies agreed on Sunday to halt production hikes for the first quarter of 2026.

WTI Crude Oil for December delivery was last seen trading up by $0.07 (or 0.11%) at $61.05 per barrel.

At a virtual meeting on Sunday, the OPEC+ alliance members agreed to hike output modestly by 137,000 barrels per day for December.

More importantly, the coalition agreed to pause production increases for the first quarter of 2026 as data shows emerging crude oil surplus globally.

This decision was driven by demand slowdown concerns and the possibility of supply challenges in Russian oil exports as the country is under sanctions imposed by the U.S. and the West.

Recently, in its oil supply and demand forecast, the International Energy Agency predicted a substantial oil market surplus, with supply growth outpacing demand growth in 2025 and 2026.

According to the IEA, supply is expected to grow by about 3.0 million barrels per day in 2025 (reaching 106.1 million bpd) and a further 2.4 million bpd in 2026, leading to total supply of 108.5 million bpd.

In contrast, the agency projected weaker demand growth at approximately 710,000 bpd for 2025 and 700,000 barrels per day for 2026 due to economic headwinds and a faster transition to electric energy sources.

This imbalance is expected to lead to a large oversupply in 2026 estimated at nearly 4 million barrels

Notably, OPEC+ has been adding around 2.9 million bpd since April 2025, about 2.7% of global crude supply.

Recently, the U.S. Treasury Department's Office of Foreign Assets Control imposed sanctions on two of Russia's major oil producers - Rosneft and Lukoil. The two corporations export 3.1 million bpd.

To avoid getting penalized by the U.S., two major purchasers of Russian oil, China and India, are looking for alternate sellers.

Weeks before, the EU adopted its 19th sanctions package against Russia targeting major Russian companies.

In the ongoing Russia-Ukraine war, Ukraine launched a drone attack on Russia's Black Sea oil port, Tuapse, causing severe damage to the installations.

The combined effect of sanctions and Ukraine's continuous attacks on Russian energy infrastructure have reportedly blocked Russia's refining capacity by approximately 500,000 bpd, leading to uncertainty over Russian exports.

Meanwhile in the U.S., the government shutdown has entered day number 34 today.

Due to the paucity of official economic data, available private releases on the economy and jobs are being parsed by the U.S. Federal Reserve as well as by the markets.

Today, the ISM Manufacturing PMI revealed a fall to 48.7 in October from 49.1 in November, raising concerns about the U.S. economy.

Currently, the CME Group FedWatch Tool is indicating a 65.3% chance for a rate cut by the U.S. Federal Reserve at its upcoming December 9-10 meeting. The decision could swing the U.S. dollar value either way.

Crude oil being a dollar-denominated commodity, analysts feel that the long-term trajectory of oil prices could become more clear after the Fed's decision.