Oil prices were pushed up further on Monday after the OPEC+ cartel agreed to delay an increase in output for another month.
Benchmark Brent crude climbed 2.3% to US$74.51 a barrel early on, adding to gains after the price fell close to the US$70 mark last week.
OPEC+, which encompasses the Organization of the Petroleum Exporting Countries, Russia and other allies, agreed on Sunday to keep production cuts in place through December.
Output had been due to increase by 180,000 barrels per day from next month, after OPEC+ previously pushed back a planned hike from October.
This would have begun to unwind OPEC+’s total 2.2 million barrel per day production cut and comes as fears over a supply glut over the coming year have weighed on oil prices, despite ongoing tensions in the Middle East.
“The oil price is too low to allow production to ramp up anytime soon,” XTB analyst Kathleen Brooks noted.
“After all, Saudi Arabia has new cities to build, and Russia is waging a costly war with Ukraine.
“Thus, we could see the proverbial oil production can get kicked down the road for some time to come.”