Oil prices rose yesterday, recovering some of last week’s losses, after the Organisation of Petroleum Exporting Countries and its allies (OPEC+) agreed to increase production by 137,000 barrels per day with effect from October.

The eight members of OPEC+ namely Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman will lift production from October by 137,000 barrels per day.

This, however, is much lower than increases of about 555,000 bpd for September and August and 411,000 bpd in July and June. According to Reuters, Brent crude rose to trade at $66.02 a barrel, while UE West Texas Intermediate crude increased to $62.26 a barrel. ]

Both benchmarks had risen more than $1 earlier in Monday’s session but prices fell more than two per cent on Friday as a weak United States’ jobs report dimmed the outlook for energy demand as they lost more than three per cent last week.

Head of commodity strategy at Saxo Bank, Ole Hansen, said: “The market had run ahead of itself in regard to this OPEC+ increase. Today we’re seeing a classic sell the rumour, buy the fact reaction. OPEC+, which includes Russia and other allies, agreed on Sunday to further raise oil production from October.

Saudi Arabia, the world’s top oil exporter, cut the official selling price for the Arab Light crude it sells to Asia a day after OPEC+ producers agreed the output hike.

Rystad Energy Chief Economist Claudio Galimberti said in a note: “Riyadh and its allies signaled a decisive pivot: defending market share now outweighs defending prices. “By allowing supply back into a market moving toward surplus, OPEC+ is playing offense, not defense. Traders have been put on notice.”