Why Oil Prices Are Rising After OPEC Hiked Production Again

Oil prices jumped Monday, erasing losses at the end of last week. (Getty Images)

Oil prices rose on Monday even though the OPEC cartel of producers decided to hike output again in October. The production increase was modest, and the group left room for flexibility ahead.

Brent crude futures, the international benchmark, rose 0.8% to $66.03 a barrel, while West Texas Intermediate futures climbed 0.6% to $62.26. Both have fallen more than 10% in 2025.

Traders were preparing in advance for this to happen, blunting the impact of the news. Crude prices fell more than 2% on Friday ahead of the expected output hike and as the tepid U.S. jobs report sparked fears about the outlook for demand.

Oil’s Monday move has almost erased that slump, likely because the hike is seen as modest. OPEC voted to lift production by 137,000 barrels a day in October, compared with the 550,000-barrel-a-day hike in September and August.

Created with Highcharts 9.0.1Source: FactSetNote: continuous futures contractsAs of Sept. 8, 3 p.m. ET

Created with Highcharts 9.0.1BrentWest Texas IntermediateSept. 3Sept. 8-7-6-5-4-3-2-101%

Another reason that oil prices rose after the announcement is that OPEC won’t actually be adding quite so many barrels. For several months, some producers were already pumping more oil than their allotment.

“Due to overproduction across this subgroup of producers, the actual incremental increase to follow from today’s announcement will be substantially smaller than the headline number, with Saudi Arabia having the vast share of the remaining spare capacity, alongside materially smaller volumes in the UAE and Kuwait,” wrote RBC Capital Markets strategist Helima Croft.

OPEC’s decision begins to unwind a tranche of cuts of around 1.65 million barrels per day announced in April 2023. Deutsche Bank strategists also noted that OPEC “signaled some caution” as it said any further return of production was subject to evolving market conditions.

Scope Markets analyst Joshua Mahony said the move may signal the end of OPEC’s expansive period of production. “The question for many is whether there is any capacity left to enact these production increases, with Saudi Arabia and the UAE likely to be the only nations that have the ability to add any more into the market,” he said. “With oil prices on the rise, this announcement looks to see the expansive period for OPEC+ drawing to a close.”

Write to Callum Keown at callum.keown@dowjones.com