Crude oil futures saw a decline on Monday morning, driven by market expectations that OPEC+ (Organization of the Petroleum Exporting Countries and its allies) will increase production output starting in October.
At 9:54 AM on Monday, November Brent oil futures were trading at $76.33, marking a 0.78% drop, while October crude oil futures on WTI (West Texas Intermediate) were down by 0.75%, trading at $73.
Market Reactions on Multi Commodity Exchange
On the Multi Commodity Exchange (MCX), September crude oil futures were trading at ₹6,140 during the initial hours on Monday, reflecting a 1.02% decrease from the previous close of ₹6,203. Meanwhile, October futures were at ₹6,081, down by 1.01% from the previous close of ₹6,143.
OPEC+ Production Plans and Market Speculation
According to a Reuters report citing OPEC sources, eight OPEC+ members are scheduled to increase output by 180,000 barrels per day in October. This adjustment is part of a broader strategy to gradually unwind the latest round of output cuts amounting to 2.2 million barrels per day, while maintaining other cuts until the end of 2025.
Warren Patterson, Head of Commodities Strategy, and Ewa Manthey, Commodities Strategist at ING Think, noted in their Commodities Feed report that the ICE Brent November contract settled 2.4% lower on Friday. The drop was attributed to reports that OPEC+ members are likely to adhere to their plan of gradually unwinding production cuts starting in October.
Demand Concerns and Supply Disruptions
Despite lingering concerns over global demand, a section of the market had speculated that OPEC+ might delay any supply increases. However, it appears the group may see the current supply disruptions in Libya as an opportunity to boost production.
The Commodities Feed report highlighted that output in Libya has been further reduced in some fields, despite the restart of three major oil fields—Sarir, Messla, and Nafoura. It remains unclear if these developments indicate progress in negotiations between Libya’s Western and Eastern governments. Some analysts suggest that the resumption of operations may be intended to meet domestic demand rather than export purposes.
China’s Manufacturing Data Adds to Market Sentiment
Adding to the market sentiment, China’s manufacturing PMI data, released by the National Bureau of Statistics, showed a decline in the official manufacturing PMI to 49.1 in August from 49.4 in July, falling below the market forecast of 49.5. This data, released over the weekend, contributed to the cautious mood in the crude oil market on Monday morning.
Other Commodity Market Movements
In other commodities, September natural gas futures on MCX were trading at ₹182.50 during the initial hours on Monday, up by 1.96% from the previous close of ₹179.
On the National Commodities and Derivatives Exchange (NCDEX), October turmeric (farmer polished) contracts were up by 3.07%, trading at ₹13,838 during the initial hours on Monday, compared to the previous close of ₹13,426. Additionally, September jeera futures were trading at ₹25,995 on NCDEX, up by 1.11% from the previous close of ₹25,710.
