Oil Gains 2% As OPEC+ Holds Output And Supply Risks Intensify

Oil prices rose 2% on Monday after OPEC+ members reaffirmed their plan to keep output steady, while the Caspian Pipeline Consortium halted exports following a major drone attack and heightened U.S.-Venezuela tensions added to supply concerns.

Brent crude futures advanced $1.22, or 1.96%, to $63.60 a barrel at 0732 GMT. U.S. West Texas Intermediate crude increased $1.22, or 2.08%, to $59.77. Both benchmarks touched their highest levels in more than a week.

Both contracts settled lower on Friday for the fourth consecutive month, marking their longest losing streak since 2023, as expectations of higher global supply weighed on prices.

The Organization Of The Petroleum Exporting Countries And Its Allies initially agreed in early November to pause efforts to regain market share amid fears of a looming supply glut.

Following a meeting on Sunday, OPEC+ said it “reaffirmed the importance of adopting a cautious approach and retaining full flexibility to continue pausing or reverse the additional voluntary production adjustments.”

The decision was widely anticipated by market participants.

LSEG senior analyst Anh Pham said the market reacted positively to the update. “For some time, the narrative has centred on an oil glut, so OPEC+’s decision to maintain its production target provided some relief and helped stabilise expectations for supply growth in the coming months.”

On Saturday, U.S. President Donald Trump said “the airspace above and surrounding Venezuela” should be considered closed, sparking fresh uncertainty in the oil market, as the South American nation is a major producer.

Trump on Sunday said he had spoken to Venezuelan President Nicolas Maduro but did not provide details. He also did not elaborate on his airspace comments or indicate whether they signalled impending military strikes. “Don’t read anything into it,” Trump said.

In a client note, ING analysts wrote that “supply risks increase following additional Ukrainian attacks on Russian energy infrastructure and an escalation in tensions between the U.S. and Venezuela.”

The Caspian Pipeline Consortium, which has Russian, Kazakh and U.S. shareholders, said on Saturday it halted operations after a mooring at its Russian terminal on the Black Sea was damaged by a Ukrainian drone.

The consortium handles more than 1% of global oil.

In Europe, growing uncertainty around a Russia-Ukraine peace deal reversed the bearish sentiment of the past two weeks, when a peace agreement seemed closer and raised the prospect of large volumes of Russian oil entering the market.

Ukraine’s military, via social media, said on Saturday it had struck a Russian oil refinery as well as the Beriev military aviation plant in the Rostov region.