Oil Prices Rise Despite OPEC+ Production Increase

(MENAFN) Oil prices climbed on Monday even as OPEC+ announced a plan to increase production in September, with persistent supply constraints and escalating US-Russia tensions outweighing concerns over the added output.

At 10:50 a.m. local time (07:50 GMT), Brent crude—the global benchmark—was priced at $69.48 per barrel, marking a 0.30% rise from Friday’s close of $69.27.

Meanwhile, the US West Texas Intermediate (WTI) crude surged 1.86%, reaching $66.77 per barrel compared to $65.55 in the previous session.

The price uptick followed an OPEC+ statement on Sunday revealing that eight member countries—Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman—would collectively raise oil output by 547,000 barrels per day (bpd) in September, relative to August levels.

This increment forms part of a gradual, flexible reduction reversal of 2.2 million bpd in voluntary cuts initiated on April 1. The September increase aligns with the group’s schedule of four monthly production steps.

OPEC+ cited a stable global economic outlook and robust market fundamentals, as reflected by low oil inventory levels, adding: "The phase-out of the additional voluntary production adjustments may be paused or reversed subject to evolving market conditions."

Meanwhile, disappointing US employment figures released August 1 have fueled speculation that the Federal Reserve (Fed) may reduce interest rates in September.

July’s US job growth totaled just 73,000, falling far short of market forecasts, according to Labor Department data published Friday.

Since higher interest rates tend to strengthen the dollar—making oil pricier for buyers using other currencies and dampening demand—weak employment data could influence market dynamics.

Further complicating matters, US President Donald Trump’s renewed calls for Fed Chair Jerome Powell to cut rates have raised alarms over the central bank’s autonomy.

Rising tensions between Trump and former Russian President Dmitry Medvedev, coupled with statements involving nuclear submarines, have intensified fears about global energy security.
On Sunday, Trump confirmed that two US nuclear submarines had been deployed “where they need to be,” following his directive in response to Medvedev’s recent remarks.

"They are in the region, yeah, where they have to be," Trump told reporters before leaving his New Jersey golf resort.

These comments followed Medvedev’s warning last week that continued US pressure on Moscow regarding the Ukraine conflict risks escalating into a wider war, potentially drawing in the US alongside Russia and Ukraine.

Trump has threatened fresh sanctions and secondary tariffs on Russia unless the Kremlin ends the war within “about 10 or 12 days,” significantly shortening the previous 50-day deadline set in July.

Daniel Hynes, senior commodity strategist at Australia and New Zealand Banking Group, noted, "The combination of a weakening economic outlook and rising supply is likely to lead to further downward pressure on prices. For the moment, this is offsetting some bullish factors. Trump continues to put pressure on Russia to reach a truce deal with Ukraine."

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