Oil prices are trading stronger during early hours on Monday, with the price of Brent up by about 1.5% following the Organisation of Exporting Countries (OPEC) and allies’ (OPEC+) decision to delay.

OPEC+ delayed plan to pump more oil into the global commodities market amidst World Bank group supply glut prediction that is expected to keep prices of oil in check at the time Chinese demand has slowed down.

The geopolitical tensions and tight economic growth prospects have created uncertainties in energy markets. Brent trades at $74.80 while US Benchmark West Texas Intermediate (WTI) was up to $71.21 on Monday.

Some OPEC+ members over the weekend decided to delay a supply increase by one month.

Members were set to gradually unwind their additional voluntary supply cuts of 2.2 million barrels per day (mb/d) from December 1, translating to a monthly supply increase of around 180,000 b/d for 12 months.

ING commodities strategists Warren Patterson and Ewa Manthey said in a note that while the delay until January does not change fundamentals significantly, it does potentially leave the market having to rethink the strategy of OPEC+.

Analysts noted that there had been reports in recent weeks that Saudi Arabia was unhappy about giving away market share and also not pleased by the lack of compliance by some OPEC+ members.

This led to suggestions that the group would likely go ahead with supply increases despite the recent weakness in prices, a view that is held by ING commodities strategists. .

However, this delayed supply increase means that maybe the group are more willing to support prices than many believe.

“However, our balance continues to show that the market will be in surplus through 2025 unless OPEC+ continues with cuts through next year.”

According to a Bloomberg survey, OPEC+ output increased by 370,000 b/d month on month to 26.9 million b/d. This increase was driven by the return of supply from Libya, where output increased by 500,000 b/d month on month.

Meanwhile, Iraqi output fell by 90,000 b/d month on month to 4.13 million b/d, though this still leaves output above Iraq’s production target of 4 million b/d, ING said.

European natural gas prices came under pressure on Friday. TTF settled 3.48% lower on the day after reports that European buyers could be moving towards a deal with Azerbaijan, which would see gas continuing to transit through Ukraine into the EU after the Russia-Ukraine transit deal expires at the end of this year.

The market has been concerned that the expiry of this deal would lead to the EU losing around 15 bcm of gas supply annually.

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