Oil prices extended gains on Monday, November 4, 2024, rising more than $1 on a decision by OPEC+ to delay by a month plans to increase output.

The market is expected to brace for a week that spans a United States presidential election and a key meeting in China.

Brent futures rose by $1.39 per barrel or 1.9% to stand at $74.49 a barrel by 0722 GMT. U.S. West Texas Intermediate (WTI) crude rose by $1.41 a barrel or 2.0% to stand at $70.90.

On Sunday, OPEC+, which includes the Organization of the Petroleum Exporting Countries plus Russia and other allies, said it would extend its output cut of 2.2 million barrels per day (bpd) for another month in December, with an increase already delayed from October because of falling prices and weak demand.

The grouping had been due to increase output by 180,000 bpd from December, Reuters reported.

“While the delay until January does not change fundamentals significantly, it does potentially leave the market having to rethink the strategy of OPEC+,” ING analysts said in a statement.

The delay bucked the expectations of some in the market for OPEC+ to deliver the planned hike in output, they added.

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“This delayed supply increase means that maybe the group are more willing to support prices than many believe,” they said.

The group is set to gradually unwind the 2.2-million-bpd cut over the coming months, while another 3.66 million bpd of production cuts will stay until the end of 2025.

Brent and WTI posted weekly declines last week of about 4% and 3%, respectively, as record U.S. output weighed on prices. But both contracts edged up on Friday on reports that Iran could launch a retaliatory strike on Israel within days.

On Thursday, U.S. news website Axios said Israeli intelligence suggested that Iran was preparing to attack Israel from Iraq within days, citing two unidentified Israeli sources.

It is questionable whether the price uptrend will be sustained as previous initial positive reactions to the delayed output hike and geopolitical tension have eventually fizzled off, said Yeap Jun Rong, a market strategist at IG.

For now, oil prices may stay in a broad consolidation range, with any upside likely to find some resistance at the level of $78.50, he added.

Markets await Tuesday’s U.S. presidential election, with polls showing Democratic Vice President Kamala Harris and Republican former President Donald Trump neck-and-neck.

And on Thursday, economists expect the U.S. Federal Reserve to cut interest rates by 25 basis points.

In China, the Standing Committee of the National People’s Congress meets from Monday to Friday and is expected to approve additional stimulus to boost the slowing economy, though analysts say the bulk may go to help cut local government debt.

The Star