WTI crude futures on the NYMEX surged roughly 1.7% in Monday’s Asian session, trading near $59.30 after OPEC+ announced it will halt oil output increases starting in the first quarter of 2026. The decision triggered strong buying at the weekly open as markets reassessed the near-term supply outlook.
Throughout this year, crude prices have faced persistent pressure as OPEC+ members collectively boosted production by about 2.9 million barrels per day since April 2025. The newly announced pause comes as the United States continues diplomatic efforts aimed at securing a peace agreement between Russia and Ukraine.
Market drivers
A potential peace deal could lead Washington to unwind sanctions on Russia, a development that would significantly expand global oil supply. Against this backdrop, OPEC+ also approved a mechanism to evaluate member states’ maximum production capacity for setting output baselines from 2027 onward, according to Reuters.
Sentiment in the oil market is also supported by growing expectations of a Federal Reserve (Fed) rate cut at this month’s policy meeting. Lower borrowing costs would typically boost economic activity and strengthen the outlook for oil demand.
According to the CME FedWatch tool, markets are pricing in an 87.4% probability of a 25 bps cut in December, which would take the target range to 3.50%–3.75%.
