OIL gains almost 2% amid OPEC+ postpones increasing production plan reports

Brent Crude (OIL) gains almost 2% today as Delegate informed that OPEC+ will postpone previously planned increasing production by 2 months. Now, markets can speculate that finally OPEC+ will stop the strategic plan, potentially leading to higher Brent prices. On the other hand, macro environment and weakening US dollar may limit potential for higher prices; also OPEC+ doesn't want a demand destruction scenario.

• Oil rebounds today from multi-month lows, due to a possible delay to output increases by OPEC+ producers and a decline in U.S. inventories. The API report showed U.S. crude oil inventories fell by 7.431 million barrels last week, exceeding the 1 million barrel draw expected by markets. However, demand concerns persist, as Chinese economy is weakening and US activity data are mixed, potentially suggesting risk 
• OPEC+ had been ready to proceed with an output increase of 180,000 barrels per day (bpd) in October. Now it will possibly start since December, as a part of strategic unwinding recent cuts of 2.2 million bpd. What's important, holding off production may be a signal, that the oil demand is weak, while rising it will put oil in a meaningful surplus from Q1 2025. Overall situation suggests that short-term prices rebound cannot be excluded, however trend reversal is not possible, without very significant geopolitical tensions. In the effect, potential oil sellers may become active faster, as futures rise.

OIL (M15 interval)

Source: xStation