Oil rebounded on modest OPEC+ output hikes, Russia sanction risks loomed

Oil prices settled higher on Monday, clawing back some of last week’s sharp losses after OPEC+ agreed to a smaller-than-expected output increase and traders weighed the risk of tighter sanctions on Russian crude.

Brent crude rose 52 cents, or 0.8%, to $66.02 a barrel.

WTI gained 39 cents, or 0.6%, to $62.26. 

The rebound came after crude slid more than 2% on Friday, pressured by a weaker US jobs report that clouded demand prospects. 

OPEC+ said it would lift output by 137,000 barrels per day in October, marking a slower pace than the previous two months and prompting traders to unwind some bearish positions.

Also adding to bullish sentiment, the US government said on Sunday it is ready to move to a second phase of sanctioning Russia, the clearest sign yet that Washington may be preparing to escalate measures against Moscow or its oil buyers over the war in Ukraine.

At the same time, Saudi Arabia cut its official selling price for Arab Light crude to Asia, a move announced just a day after the OPEC+ decision. The move signalled a clear pivot by Riyadh to prioritise defending market share over propping up prices.

Written: Farid Muzaffar