Oil rises after OPEC+ pushes back output hike, extends cuts through 2026

Oil prices rose on Thursday after OPEC+ decided to delay its planned output increase by three months to April 2025, and extend the full unwind of production cuts by a year until the end of 2026.

Brent crude was up 38 cents, or 0.53%, to $72.69 a barrel at 10:56 a.m. ET, while U.S. West Texas Intermediate (WTI) rose 36 cents, or 0.53%, to $68.90 a barrel.

OPEC+, the Organization of the Petroleum Exporting Countries plus allies including Russia, had been planning to start unwinding cuts from October 2024 but slowing global demand and booming production outside of the group forced it to postpone the plans on several occasions.

"There were questions coming into the meeting as to whether there was cohesion or not (among OPEC+), they are definitely coming out of this unified but this also shows the challenging supply landscape they have before them while trying to prop up this market," said John Kilduff, partner at Again Capital in New York.

The gradual unwinding of 2.2 million barrels per day (bpd) of cuts will start from next April with monthly increases of 138,000 bpd, according to Reuters calculations, and lasting 18 months until September 2026. OPEC+ pumps around half the world's oil.

"This was the only option they (OPEC+) had available unless they were prepared to suffer the consequences of lower prices," said Ole Hansen, head of commodity strategy at Saxo Bank.

"They reiterate that these barrels will indeed come back," said Bjarne Schieldrop, chief commodities analyst at SEB. "It's a limited time frame. This means there is no upside to the oil price in the next couple of years."

Elsewhere, a larger-than-expected draw in U.S. crude stockpiles last week also provided some support to prices.

And in the Middle East, Israel said on Tuesday it would return to war with Hezbollah if their truce collapses and its attacks would go deeper into Lebanon and target the state itself.

Meanwhile, Donald Trump's Middle East envoy has travelled to Qatar and Israel to kick-start the U.S. president-elect's diplomatic push to help reach a Gaza ceasefire and hostage release deal before he takes office on Jan. 20, a source briefed on the talks told Reuters.