Oil Prices Spike Amid Modest Supply Boost by OPEC+, War Tensions

Speculators have raised their long positions on Brent and WTI oil, signaling investors are bullish on prices.

A worker at an oil facility in the northern Al-Rawdhatain oilfield in Kuwait on March 28, 2005. Yasser Al-Zayyat/AFP/Getty Images

Crude oil prices jumped on Sept. 8 after OPEC+ decided to boost output at a slower pace amid growing concerns that the Russia–Ukraine war will not end soon.

Brent crude oil futures were trading at $66.92 per barrel as of 8:20 a.m. EDT on Sept. 8, up by about 2.17 percent from the Sept. 5 close. WTI crude oil futures, the main oil benchmark in North America, were trading at $63.24, up by more than 2 percent.

In a Sept. 7 statement, OPEC+ announced that it would boost oil output by 137,000 barrels per day (bpd) beginning in October. This increase brings back some of the 1.65 million bpd of output the group had cut in April 2023.

The output increase for October was decided “in view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories,” the group stated.

OPEC members include Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, and Algeria, among others. OPEC+, a broader coalition established in 2016, includes OPEC members along with non-OPEC countries such as Russia, Oman, Kazakhstan, and Mexico.

OPEC+ stated that the 1.65 million bpd of output may be “returned in part or in full subject to evolving market conditions and in a gradual manner.” The members “reaffirmed the importance of adopting a cautious approach and retaining full flexibility to pause or reverse the additional voluntary production adjustment.”

The October production boost is lower than the 547,000 bpd of output OPEC+ decided to bring back for September and the 548,000 bpd added in August.

“Buying emerged as the OPEC+ output increase was smaller than anticipated, while fading prospects for peace in the Russia–Ukraine war and views that Russian oil won’t flood the market also supported prices,” Rakuten Securities commodity analyst Satoru Yoshida said.

Over the weekend, Russia launched an air attack against Ukraine, setting ablaze the main government building in central Kyiv. On Sept. 7, U.S. President Donald Trump signaled that Washington was ready to impose more sanctions on Russia.

The renewed intensification of the conflict is contributing to keeping oil prices elevated.

Positive oil demand from China is also a bullish factor. Trade data from Beijing show crude oil inflows to China rising on both a monthly and annual basis in August, ING Bank said in a Sept. 8 statement. So far this year, cumulative oil imports to China are up 2.5 percent year-over-year, it noted.

The bullishness of investors regarding oil prices is evident in their market positions.

“Speculators bought 44,511 lots of ICE Brent for a second straight week over the last reporting week, leaving them with a net long position of 251,054 lots, a move predominantly driven by fresh buying,” the bank said.

“Similarly, for NYMEX WTI, speculators increased net longs by 3,062 lots to 27,287 lots. The rise comes after four consecutive weeks of decline. Money managers boosted bullish bets on crude oil amid tightness in the US market and geopolitical risks.”

Gas Prices, Oil Forecast

At the pump, the national average price of regular gas in the United States was $3.19 per gallon as of Sept. 8, down marginally from $3.27 a year ago but up from $3.15 a month ago, according to data from the American Automobile Association (AAA).

California had the highest gas price at $4.62 per gallon, followed by Hawaii, Washington, and Oregon, all of which also had prices exceeding $4 per gallon, AAA data show. Mississippi had the lowest price at $2.71 per gallon, followed by Oklahoma, Texas, and Louisiana.

“Overall, summer gas prices have remained steady and should trend downward as the fall season begins,” the AAA said in an Aug. 28 post. The fall season in the United States is between late September and December.

The Energy Information Administration (EIA) had predicted Brent crude oil prices to decline significantly over the coming months, according to an Aug. 12 analysis by the agency.

EIA forecast prices to fall from “$71 per barrel (b) in July to $58/b on average in the fourth quarter of 2025 ... and around $50/b in early 2026.”

“The price forecast is driven largely by more oil inventory builds following OPEC+ members’ decision to accelerate the pace of production increases,” the EIA stated.

“Low oil prices in early 2026 will lead to a reduction in supply by both OPEC+ and some non-OPEC producers, which we expect will help moderate inventory builds later in 2026. We forecast the Brent crude oil price will average $51/b next year.”

Reuters contributed to this report.