Oil prices rose more than $1 on Monday (September 8), recovering some of last week's losses, after an OPEC+ production increase appeared to moderate and amid concerns over possible further sanctions on Russian crude.

OPEC+ signaled plans to increase production further starting in October, but the amount was lower than some analysts had anticipated. Reuters reported earlier this month that members were considering another increase.

"The market has reacted too quickly to this OPEC+ production increase," said Ole Hansen, head of commodity strategy at Saxo Bank. "Today we are seeing a classic sell the rumor, buy the fact reaction." Brent crude rose $1.16, or 1.8%, to $66.66 per barrel at 08:58 GMT, while U.S. West Texas Intermediate crude rose $1.09, or 1.8%, to $62.96 per barrel.

Both crude oil benchmarks fell more than 2% on Friday as a weak US jobs report dimmed the outlook for energy demand. Crude oil prices both fell more than 3% last week. OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) plus Russia and other allies, agreed on Sunday to further increase oil production starting in October.

OPEC+ has been increasing production since April after years of production cuts aimed at supporting the oil market. This latest decision comes despite the possibility of an oil oversupply during the Northern Hemisphere's winter months.

The eight OPEC+ members will increase production by 137,000 barrels per day starting in October. However, this figure is significantly lower than the increases of around 555,000 barrels per day for September and August and 411,000 barrels per day in July and June.

The impact of these increases is expected to be relatively small, as some of these members were already overproducing. Therefore, the higher production levels will likely cover barrels already on the market, analysts said. "Expectations of tighter supply due to potential new US sanctions on Russia are also providing support," said Toshitaka Tazawa, an analyst at Fujitomi Securities.

US President Donald Trump said on Sunday that he was ready to move to a second phase of sanctions against Russia, the closest he has come to saying he would soon increase sanctions against Moscow or its oil buyers over the war in Ukraine.

New sanctions against Russian oil buyers could disrupt crude flows, Frederic Lasserre, global head of research and analysis at energy firm Gunvor [RIC:RIC:GGL.UL], said on Monday. Russia launched its largest airstrike of the Ukraine war on Sunday, setting fire to a key government building in downtown Kyiv and killing at least four people, Ukrainian officials said.

Trump said on Sunday that European leaders would visit the United States on Monday and Tuesday to discuss ways to resolve the conflict. In a note late last week, Goldman Sachs said it expects a slightly larger oil surplus in 2026 as rising U.S. supply outweighs falling Russian supply and stronger global demand. Goldman Sachs maintained its Brent/WTI price forecast for 2025 and projected an average price of $56/$52 per barrel in 2026. (alg)

Source: Reuters