Oil prices inch up after OPEC+ pushes back output hike, extends cuts through 2026

By Paul Carsten

LONDON (Reuters) -Oil prices climbed slightly on Thursday after OPEC+ decided to delay planned output increase until April 2025 and extend the full unwind of production cuts by a year until the end of 2026.

Brent crude was up 40 cents, or 0.55%, to $72.71 a barrel at 1424 GMT, while U.S. West Texas Intermediate (WTI) rose 40 cents, or 0.58%, to $68.94 a barrel.

OPEC+, made up the Organization of the Petroleum Exporting Countries plus allies including Russia, had been planning to start unwinding cuts from October 2024 but a slowdown in global demand and rising output outside the group forced it to postpone the plans on several occasions.

"It will not make next year's oil balance tight and supply surplus is still anticipated," said Tamas Varga of oil broker PVM.

The gradual unwinding of 2.2 million barrels per day of cuts will start from April 2025 with monthly increases of 138,000 bpd, according to Reuters calculations, and lasting 18 months until September 2026.

"This was the only option they (OPEC+) had available unless they were prepared to suffer the consequences of lower prices," Ole Hansen, head of commodity strategy at Saxo Bank.

"They reiterate that these barrels will indeed come back," said Bjarne Schieldrop, chief commodities analyst at SEB. "It's a limited time frame. This means there is no upside to the oil price in the next couple of years."

Elsewhere, a larger-than-expected draw in U.S. crude stockpiles last week also provided some support to prices.



In the Middle East, Israel said on Tuesday it would return to war with Hezbollah if their truce collapses and its attacks would go deeper into Lebanon and target the state itself.

Meanwhile, Donald Trump's Middle East envoy has travelled to Qatar and Israel to kick-start the U.S. president-elect's diplomatic push to help reach a Gaza ceasefire and hostage release deal before he takes office on Jan. 20, a source briefed on the talks told Reuters.

Source: Investing.com