Oil Prices Shrug Off OPEC+ Plans to Pause Supply Hikes

The oil cartel’s recent decision could mitigate global oil supply glut fears.

An installation depicting a barrel of oil with the OPEC logo, during the COP29 U.N. climate change conference in Baku, Azerbaijan. Maxim Shemetov/File Photo/Reuters

Crude oil prices were little changed on Nov. 3, shrugging off OPEC+’s plans to pause its supply increase in the first quarter of 2026.

The U.S. benchmark West Texas Intermediate crude oil prices dipped by about 0.3 percent, to about $60.80 a barrel on the New York Mercantile Exchange.

Brent crude, an international benchmark for oil prices, slipped by about 0.2 percent, to approximately $64.60 a barrel on London’s ICE Futures exchange.

Both U.S. and Brent oil prices have declined by about 14 percent this year.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, agreed on Nov. 2 to increase production by 137,000 barrels per day in December.

OPEC+ delegates—namely from Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia, and the United Arab Emirates—also confirmed that they would suspend output hikes in the first quarter. The decision is in anticipation of a seasonal slowdown in demand.

“In view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories, the eight participating countries decided to implement a production adjustment of 137,000 barrels per day from the 1.65 million barrels per day additional voluntary adjustments announced in April 2023,” OPEC officials stated.

The U.S. oil and gas industry has been facing a series of headwinds over the past several months, including uncertainty regarding OPEC’s production plans, tariffs, and geopolitical challenges.

Assessing Oil Market Conditions

Despite periods of conflict-fueled volatility in international energy markets this year, oil prices have been trending downward on concerns regarding a global oil supply glut and weaker economic conditions in Asia.

However, continued fighting in the Ukraine–Russia war, strengthened sanctions on Moscow, and potentially slower drilling activity in the United States could mitigate oversupply fears.

The Trump administration implemented new sanctions on Russia’s two largest oil firms—Lukoil and Rosneft—as part of broader efforts to pressure Moscow into stopping its war in Ukraine.

Kyiv has also intensified its attacks on Russian energy infrastructure, particularly its refineries, which have exacerbated supply concerns in the distillate market.

Meanwhile, for the week ending on Oct. 31, drilling activity weakened, with the number of active rigs sliding to 414 from 420 in the previous week, according to Baker Hughes data. The crude oil rig count is down by almost 14 percent from a year ago.

At the same time, despite fewer active rigs, domestic crude output has remained at record levels.

U.S. oil and gas firms are producing more than 13.6 million barrels of crude oil per day, data from the Energy Information Administration show. This represents a 1 percent increase year over year.

Volumes could start to slow in the year ahead, according to ING commodity strategists.

“Expectations for a large surplus next year and downward pressure on prices suggest that we should see US crude oil output struggling to grow in 2026,” they said in a Nov. 3 note.

A pump jack extracts oil in Bakersfield, Calif., on March 20, 2025. John Fredricks/the Epoch Times

An executive at a U.S. exploration and production firm expressed concerns about lower prices and higher input costs in the Federal Reserve Bank of Dallas’s third-quarter Energy Survey.

“The administration is pushing for $40 per barrel crude oil, and with tariffs on foreign tubular goods, [input] prices are up, and drilling is going to disappear. The oil industry is once again going to lose valuable employees,” the executive stated.

Multiple forecasts indicate that oil prices could remain low heading into the new year.

Oil prices are projected to average $52 a barrel in 2026, the Energy Information Administration said in its October Short-Term Energy Outlook report. It also raised its forecast for domestic output by 200,000, to 13.5 million barrels per day.

“The long-term trend in oil remains decidedly bearish with a sizeable surplus expected in 2026 set to keep pressure on energy prices,” Tom Essaye, president and co-founder of the Sevens Report, said in a note emailed to The Epoch Times.

The modest supply shift by OPEC+ may prompt analysts to adjust their forecasts.

Morgan Stanley, in a note dated Nov. 3, revised its forecasts for oil prices. The bank’s analysts expect Brent crude prices to be $60 per barrel in the first half of 2026, up from their previous estimate of $57.50 a barrel.

“The decision to halt quota hikes during the first quarter does not materially change our production forecasts but still sends an important signal, i.e., the group is still adjusting supply in response to market conditions,” Morgan Stanley stated.

In other energy markets to kick off the trading week, natural gas prices rose by about 0.6 percent, to $4.40 per million British thermal units. Gasoline and heating oil futures were little changed at $1.91 and $2.39 per gallon, respectively.

Reuters contributed to this story.