By Alex Lawler LONDON (Reuters) – Oil extended gains on Tuesday, supported by OPEC+’s latest oil output hike being smaller than anticipated, expectations that China will continue stockpiling oil and concerns over potential new sanctions on Russia. Eight members of the Organization of the Petroleum Exporting Countries and allies agreed on Sunday to raise production […]
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Oil rises on modest OPEC+ output hike, Russia supply concern
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By Alex Lawler
LONDON (Reuters) – Oil extended gains on Tuesday, supported by OPEC+’s latest oil output hike being smaller than anticipated, expectations that China will continue stockpiling oil and concerns over potential new sanctions on Russia.
Eight members of the Organization of the Petroleum Exporting Countries and allies agreed on Sunday to raise production from October by 137,000 barrels per day, lower than the increases of about 550,000 bpd they made for September and August.
Brent crude rose 73 cents, or 1.1%, to $66.75 a barrel at 0810 GMT, while U.S. West Texas Intermediate crude climbed 58 cents, or 0.9%, to $62.84.
“Prices are holding up amid speculation that production will not rise by the amount the eight members have allowed themselves, and not least the fact China according to data has been buying around 0.5 million barrels per day towards stockpiling,” said Ole Hansen of Saxo Bank.
China’s stockpiling of oil, which has helped soak up excess production this year, is likely to continue at a similar rate in 2026, the chief strategist for commodity trading house Gunvor said on Monday.
Speculation of more sanctions on Russia after the country’s biggest air attack on Ukraine set fire to a government building in Kyiv also supported prices. U.S. President Donald Trump said he was ready to move to a second phase of restrictions.
The European Union’s top sanctions official was in Washington with a team of experts to discuss what would be the first coordinated transatlantic measures against Russia since Trump returned to office.
Further sanctions on Russia would diminish its oil supply to global markets, which could support higher oil prices.
The U.S. Federal Reserve’s Federal Open Market Committee meets next week, and traders see an 89.4% chance of a quarter-point interest rate cut.
Lower rates reduce consumer borrowing costs and can boost economic growth and demand for oil.
(Additional reporting by Anjana Anil in Bengaluru and Sam Li in Beijing; Editing by William Maclean)