Oil prices went down by 3 per cent on Monday as the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) plan for another increase in oil output in November, and the resumption of oil exports by Iraq’s Kurdistan region via Turkey raised the global supply outlook.
Brent crude futures dropped $2.16 or 3.1 per cent to close at $67.97 a barrel and the US West Texas Intermediate (WTI) crude futures shrank by $2.27 or 3.45 per cent to settle at $63.45 per barrel.
OPEC+ is due to meet on Sunday and is likely to confirm a production boost of at least 137,000 barrels per day for November to gain market share.
Eight OPEC+ countries will hold an online meeting on October 5 to decide on November output. The group has been pumping almost 500,000 barrels per day less than its targets.
OPEC+ has reversed its strategy of output cuts from April and has already raised quotas by more than 2.5 million barrels per day, representing about 2.4 per cent of world demand, to boost market share and after coming under pressure from US President Donald Trump to lower oil prices.
The group’s total output reductions amounted at their peak to 5.85 million barrels per day, made up of three different elements – voluntary cuts of 2.2 million barrels per day, plus 1.65 million barrels per day by eight members, and another 2.0 million barrels per day by the whole group.
Hikes have fallen short of the pledged amounts because most members are pumping at capacity, which may affect OPEC+’s third group-wide layer of cuts of 2 million barrels per day which is due to last until the end of 2026.
Also, crude oil flowed through a pipeline from the semi-autonomous Kurdistan region in northern Iraq to Turkey on Saturday for the first time in over two years, adding to supply worries.
The resumption is expected eventually to bring up to 230,000 barrels per day of crude back to international markets.
Meanwhile, Russia attacked parts of Ukraine early on Sunday in one of the most sustained attacks on the capital since its invasion in 2022. Recently, Ukrainian drone attacks on Russian energy infrastructure dented the country’s fuel exports.
President Donald Trump said on Monday it was time for Palestinian militant group Hamas to accept a 20-point peace proposal that he agreed to with Israeli Prime Minister Benjamin Netanyahu regarding the future of Gaza.