• WTI rebounds at the start of the week following OPEC+’s decision to freeze production hikes.
• Expectations of monetary easing by the Federal Reserve strengthen the Oil demand outlook.
• Supply risks linked to the CPC and geopolitical tensions also support the market.

West Texas Intermediate (WTI) US Oil advances at the start of the week, trading around $59.30 at the time of writing. Crude Oil benefits from strong buying interest after the Organization of the Petroleum Exporting Countries and their allies (OPEC+) decided to halt all production increases from the first quarter of 2026. This marks a significant shift after several months of rising supply, during which the group had added nearly 2.9 million barrels per day since April 2025.

The OPEC+ policy change comes amid a sensitive geopolitical backdrop, as the United States (US) attempts to foster a durable de-escalation between Russia and Ukraine. Washington has suggested that a peace agreement could include the easing of sanctions on Moscow, a scenario that would likely increase global Oil supply. Meanwhile, the alliance approved a new mechanism to assess members’ maximum sustainable production capacity starting in 2027, which will define future output baselines. A measure reported by Reuters that could spark friction among countries seeking higher quotas.

Oil markets are also reacting to significant supply risks. The Caspian Pipeline Consortium (CPC) suspended loadings at its Novorossiysk terminal after one of its moorings was damaged in Ukrainian attacks, heavily disrupting exports of Kazakh Oil. Available data shows CPC flows averaged around 1.48 million barrels per day this year, supported by expansion at Kazakhstan’s Tengiz field. Kazakhstan has now begun activating plans to redirect part of its shipments.

Adding to this, tensions between the US and Venezuela are rising, with the US President Donald Trump considering closing Venezuelan airspace. A move that threatens roughly 800,000 barrels per day of crude, most of which is exported to China.

On the macroeconomic front, strongly dovish expectations regarding the Federal Reserve (Fed) are also underpinning Oil prices. Monetary easing would improve financial conditions, support economic activity, and strengthen the outlook for energy demand. According to the CME FedWatch Tool, markets assign an 87.4% chance to a 25-basis-point rate cut in December, bolstering appetite for cyclical commodities such as Oil.

In this environment of anticipated supply tightening, geopolitical risk, and monetary support, WTI remains firmly bid around $59.30, as traders price in the possibility of a more pronounced rebalancing of the Oil market over the coming months.