Oil Swings as OPEC+ Braces for Demand Slowdown and Surplus Ahead

(Bloomberg) -- Oil fluctuated between small gains and losses as traders weighed the OPEC+ alliance’s plan to pause its output revival next quarter on anticipation demand will slow, while the market is seen headed for oversupply.

Brent traded near $65 a barrel. OPEC+ delegates said the decision on Sunday to halt production hikes from January reflects an expectation for a seasonal slowdown. The move comes against a backdrop of widespread forecasts for excess supplies next year.

Most Read from Bloomberg

Trump’s 90,000-Square-Foot Ballroom Plan Puzzles the Experts Colorado Ski Haven Asks Voters If It Can Borrow More for Housing An International World Series Returns After 32 Years. How Toronto Is Owning The Moment The Retail Storage Hiding Under the Champs-Elysees New York City Lashed by Strong Winds After Flooding Kills Two

Global benchmark Brent has slumped about 10% over the past three months as the Organization of the Petroleum Exporting Countries and its partners ramped up output, while producers outside the group also increased production. Prices recently bounced from a five-month low after tighter US sanctions raised some question marks about supply from Russia.

“The decision to halt quota hikes during 1Q does not materially change our production forecasts but still sends an important signal,” Morgan Stanley analysts including Martijn Rats and Charlotte Firkins wrote. “The group is still adjusting supply in response to market conditions.”

The eight key members of OPEC+ are left with roughly 1.2 million barrels a day of their current supply tranche still to restore. Actual output increases have fallen short of advertised volumes, as some members offset earlier overproduction and others struggle to pump more.WATCH: OPEC+ said it planned to pause output increases in the first quarter of 2026, following another modest hike for next month. Stephen Stapczynski reports.Source: Bloomberg

Following the OPEC+ move, Morgan Stanley raised its near-term price forecast for Brent, while also maintaining a warning for a “substantial surplus.” The United Arab Emirates, meanwhile, on Monday added to the chorus of producers who have come out to downplay glut concerns.

Traders will also be monitoring disruptions to flows, after a Ukrainian drone attack in the Black Sea left a tanker ablaze and damaged loading facilities in the port city of Tuapse. The area is home to a refinery run by Rosneft PJSC, which was sanctioned last month by the US, along with Lukoil PJSC.

President Donald Trump, meanwhile, threatened possible US military action against Islamic militants in Nigeria, Africa’s largest oil producer, if the country’s government didn’t halt the groups’ “killing of Christians.” He also hinted at an immediate cutoff in aid to the OPEC member.

Story Continues

Most Read from Bloomberg Businessweek

New York’s Golden Handcuffs: Why the City Has a Special Hold on the Rich The Risky Movement to Make America Nuclear Again Cracks in the Credit Market Could Be a Warning for Wall Street The Popular 3D-Printed Gun Globalizing the Second Amendment OpenAI’s Chairman Is Thinking a Lot About Bubbles Right Now

©2025 Bloomberg L.P.

View Comments