Oil prices rebounded on Monday, rising by more than 1% and clawing back some of the ground lost last week.
The gains came as investors weighed the likelihood of fresh sanctions on Russian crude following overnight strikes on Ukraine, which countered concerns over OPEC+’s decision to raise output.
Brent crude on Monday morning was up 80 cents (1.2%) to $66.30 per barrel, while U.S. West Texas Intermediate gained 75 cents (1.2%) to $62.62.
The recovery followed a sharp slide on Friday, when both benchmarks dropped over 2% after disappointing U.S. employment figures signalled weaker energy demand. Overall, crude futures had fallen more than 3% last week.
On Sunday, OPEC+ — the coalition of oil producers comprising OPEC, Russia, and their allies — confirmed plans to expand production from October. The move, driven largely by Saudi Arabia’s bid to defend its market share, represented a slower pace of supply increases compared with preceding months.
Since April, the group has been gradually reversing years of production cuts designed to stabilise the market. However, the latest adjustment surprised traders, especially given concerns about a potential supply glut during the coming winter in the northern hemisphere.
Under the new deal, eight OPEC+ members will raise combined production by 137,000 barrels per day in October — a sharp reduction from increases of 555,000 bpd in August and September, and 411,000 bpd in June and July.
“Buying emerged as the output increase was smaller than anticipated, while fading prospects for peace in the Russia-Ukraine war and views that Russian oil won’t flood the market also supported prices,” said Satoru Yoshida, commodity analyst at Rakuten Securities.
The geopolitical backdrop also added to market tension. Ukraine reported that Russia carried out its most intense aerial assault since the conflict began, setting ablaze a central government building in Kyiv and leaving at least four people dead.
Meanwhile, U.S. President Donald Trump revealed that European leaders would travel to Washington early in the week to discuss possible resolutions to the war. He reiterated his dissatisfaction with the ongoing conflict but expressed optimism that “the war would soon be settled.”
According to Toshitaka Tazawa of Fujitomi Securities, crude prices were also lifted by “relief over OPEC+’s modest output hike and a technical bounce following last week’s decline.” He added that “expectations of tighter supply from potential new U.S. sanctions on Russia are also lending support.”
Looking ahead, Goldman Sachs projected that global oil markets could face a slightly larger surplus in 2026 due to supply expansions in the Americas. This would offset reduced Russian output and stronger consumption worldwide.
The bank left its 2025 Brent/WTI forecasts unchanged but set 2026 averages at $56 and $52 per barrel, cautioning that “risks to our 2025-2026 price forecast are two-sided but skewed modestly to the upside.”
