OPEC+ confirmed on Sunday a modest oil supply increase of 137,000 barrels per day (bpd) for December, in line with expectations. However, the key takeaway from the meeting was the group’s decision to pause further supply hikes through the first quarter of 2026, according to ING commodity strategists Ewa Manthey and Warren Patterson.
OPEC+ Cautious as Market Faces Potential Surplus
ING analysts noted that the oil market is projected to face its peak surplus through early 2026, making the decision to pause supply growth “sensible.” Still, recent US sanctions on Russia have added uncertainty to these forecasts.
“If sanctions meaningfully disrupt Russian oil flows, the expected surplus could narrow, giving OPEC+ room to reconsider its production policy early next year,” Manthey and Patterson wrote. “Russian oil exports will be closely monitored in the coming weeks, especially after the November 21 deadline for transactions with Rosneft and Lukoil expires.”
Speculative Buying Rises on Russia Sanctions
Recent market positioning data shows a sharp increase in speculative activity following the sanctions announcement.
- ICE Brent net long positions surged by 119,046 lots to 171,567, driven by new long positions and substantial short covering.
- Gross longs rose by 56,968 lots, while gross shorts fell by 62,078 lots.
- In ICE Gasoil, speculators added 33,930 lots, bringing net longs to 79,696 lots — reflecting heightened supply concerns amid Russian export risks and Ukrainian drone attacks on refining infrastructure.
US Rig Count Falls, Output Near Record High
In the US, Baker Hughes data showed the oil rig count dropped by six last week to 414, marking a continued decline in drilling activity as weaker prices weigh on producer sentiment.
Despite this, EIA data indicates that US crude oil production reached a record 13.79 million bpd in August, up 2.9% year-on-year and less than 1% higher month-on-month.
ING expects US output growth to slow in 2026, as oversupply expectations and soft price trends limit investment in new drilling.
