Oil Surges for September and Q3; OPEC Considers Higher Output

By Barani Krishnan

Oil prices experienced their best month in three during September, posting nearly a 10% increase. This upswing has seemingly encouraged OPEC+ producers to contemplate a higher output than initially planned for the coming months.

West Texas Intermediate (WTI) crude, the benchmark for U.S. oil, closed the last day of September at $75.03 per barrel, rising by 20 cents or 0.3% on that day alone. For the month, WTI increased by 9.5%, marking its most significant gain since June. Over the third quarter, it saw a modest rise of 2%.

Brent crude, the global benchmark for oil, ended Thursday’s session at $78.52 per barrel, down by 12 cents or 0.2%. In September, Brent gained 7.6%, which is close to its highest increase since June. For the third quarter, its total rise was 4.5%.

Analyst Ed Moya from OANDA noted, “OPEC+ could easily justify offering more than the gradual 400,000 barrels per day increase scheduled for November, and they should consider doing this.” He added, “While OPEC+ has previously resisted pressures from President Biden this summer, the current energy crisis could lead to significant market volatility and negatively impact global growth. Therefore, OPEC+ should think about making adjustments in their upcoming meeting.”

The OPEC+ alliance, consisting of the 13-member Saudi-led Organization of the Petroleum Exporting Countries and 10 other producers led by Russia, is reportedly considering exceeding their existing agreement to increase production by 400,000 barrels per day during their upcoming meeting. This consideration comes amid a backdrop of oil prices nearing three-year highs and rising consumer demands for greater supply.