Oil prices rose on Sunday after OPEC and its allies agreed to a modest increase of 137,000 barrels per day (bpd) from November, signalling a cautious approach to production growth amid persistent concerns of oversupply.

Brent crude climbed by nearly 1.5 percent to $65.30 per barrel, a 1.19 percent increase, while West Texas Intermediate (WTI) rose to $61.60, a 1.18 percent increase as markets reacted to the smaller-than-expected hike.

The output adjustment mirrors that of October and comes after the group dismissed rumours of a more aggressive 500,000 bpd increase.

So far this year, OPEC+ has raised its collective target by over 2.7 million bpd, equivalent to around 2.5 percent of global demand, as the alliance seeks to reclaim market share from non-OPEC producers without triggering a sharp price decline.

According to Oilprice, leading up to the meeting suggested friction between Russia and Saudi Arabia, with Moscow said to favour a modest hike due to sanctions-related constraints and fears of weakening prices, while Riyadh pushed for a bolder increase.

OPEC attributed its measured decision to a “steady global economic outlook and healthy market fundamentals,” citing low global oil inventories as evidence of balance.

The alliance will reconvene on November 2 to reassess production levels and may revise its strategy depending on demand trends and inventory data. (BUSINESS DAY)