Oil prices edged upward by over $1 on Monday as OPEC+ announced a one-month delay to its scheduled December production increase. This decision came amid concerns about sluggish demand from major markets, notably China, and a rise in supply outside the alliance, which includes the Organization of the Petroleum Exporting Countries and allies like Russia. Brent crude rose $1.14 per barrel, reaching $74.24, while U.S. West Texas Intermediate crude also gained $1.14, settling at $70.63 per barrel.

OPEC+ had planned to increase output by 180,000 barrels per day (bpd) in December as part of a phased approach to relax the production cuts implemented to stabilize prices during the pandemic downturn. However, weak demand and recent economic data raised concerns within OPEC+, leading the group to postpone the increase following consultations among its ministers. The alliance's statement confirmed, "The eight countries decided to extend the 2.2 million bpd cut for a month until the end of December."

The latest decision reflects OPEC+'s commitment to maintaining market stability as members closely monitor supply-demand dynamics. "OPEC and Saudi Arabia have repeatedly said they do not target a certain price and make decisions based on market fundamentals," an OPEC official noted. With global oil prices under pressure from rising supplies and a decrease in Middle East tensions, OPEC+ has prioritized production cuts to sustain price levels above recent lows.

The December production increase, initially set at 180,000 bpd, represented only a small fraction of the 5.86 million bpd that OPEC+ has restricted from the market to date, which equates to approximately 5.7% of global demand. The postponement of this increase is the latest adjustment in OPEC+'s ongoing effort to regulate production and maintain a balanced market amid evolving conditions. Brent crude, which hovered above $73 per barrel on Friday in anticipation of the delay, is still not far from its annual low of just under $69 in September.

This is not the first time OPEC+ has adjusted its output schedule due to market fluctuations. In October, the group delayed an increase in response to falling prices and a surge in oil supplies. Rising production in regions outside OPEC, particularly in North America, has exerted additional pressure on global prices, prompting OPEC+ to retain its production cuts longer than initially expected. The alliance reiterated its "collective commitment to achieve full conformity" with its output targets.

With its decisions closely tied to compliance, OPEC+ has been scrutinizing output levels, particularly from Iraq and Kazakhstan, who have recently exceeded their quotas. The alliance's statement acknowledged recent commitments from Iraq, Russia, and Kazakhstan to adhere to output targets and implement additional compensation cuts for overproduction.

Looking ahead, OPEC+'s cuts of 3.66 million bpd are set to remain in effect until the end of 2025 under a June agreement. The group's December 1 meeting will focus on reviewing its 2025 production policies, while any additional adjustments to the phased increase of the 2.2 million bpd cut will be scheduled gradually from January.

The market has reacted to OPEC+'s decision with optimism, as Brent and WTI futures remain above recent lows. Technical indicators, according to analysts, suggest that oil prices could see a rally if key resistance levels hold. However, some caution that if Brent and WTI fail to break higher resistance points, another downward trend could be possible.