Oil prices dropped early this week as northern Iraq resumed exports and OPEC+ signals a modest production increase for November, raising concerns of a widening oversupply despite elevated prices, Commerzbank's commodity analyst Barbara Lambrecht notes.

Rising supply pressures weigh on Oil prices

"Oil prices fell significantly at the start of the week: not only did exports from northern Iraq actually resume at the weekend, but according to sources, the eight OPEC+ countries that voluntarily cut their production could announce the next increase in their production for November this coming Sunday."

"This is backed up by the fact that Saudi Arabia is likely to be keen to expand its market share, and also by the fact that prices are still high. However, as in the previous month, the increase in production is likely to be only a small one, at 137,000 barrels per day. Nevertheless, this could mean that the oversupply could be even higher than has already been predicted."