DTN Oil Update
Oil Gains on Modest OPEC+ Output Hike, Sanctions Risks
VIENNA (DTN) -- Oil prices rose Monday morning following members of the Organization of Petroleum Exporting Countries agreeing to the smallest monthly output hike since the group started unwinding production cuts. Oil recovered a part of last week's losses which were triggered by reports of OPEC+ considering a larger production increase in October.
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NYMEX-traded WTI for October delivery rose $1.10 to trade near $62.97 bbl, and ICE Brent for November delivery gained $1.20 to $66.70 bbl.
October RBOB gasoline futures added $0.0269 to $1.9911 gal, and the front-month ULSD contract was up $0.0419 to $2.3289 gal.
The U.S. Dollar Index dropped 0.163 points to 97.565.
In a virtual meeting held Sunday, member countries agreed to raise October production by 137,000 bpd, compared to previous monthly quota increases which ranged from 411,000 bpd to 548,000 bpd. This move was largely interpreted as a sign of constraint by the producer group which seeks to regain lost market share.
U.S. President Donald Trump on Sunday signaled a willingness to ramp up sanctions on Russia and buyers of Russian oil after Russia launched its largest drone and missile attack since the beginning of the war in Ukraine. The administration has over the past weeks sought to coordinate a new round of sanctions with the European Union, which itself is reportedly preparing its 19th sanctions package.
Next, market participants are awaiting OPEC's latest monthly oil market report, scheduled for release Thursday, for clues on how close the group came to its output hike targets. Monthly reports by the U.S. Energy Information Administration and the International Energy Agency are also due this week and will be parsed for changes to demand growth and global inventory forecasts.