WTI Oil Rallies 1.8% as Russian Supply Concerns Outweigh Modest OPEC + Output Hike

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Oil prices have risen as much as 1.8% at the start of the week as Oil pares last week's losses. The rally this morning has come as a surprise to some quarters after eight OPEC + members agreed to lift output by 137,000 bpd from October.

However, the move by OPEC + was seen as more modest than expected and thus saw market participants shrug off the potential consequences. On top of that, markets are focused on the possibility of more sanctions on Russian crude.after Russia hit Ukraine with its biggest air attack since the start of the war.

For now, concerns around Russian supply are keeping Oil prices supported.

Russia-Ukraine Developments

Frederic Lasserre, an expert from the energy trading company Gunvor, stated on Monday that new sanctions against countries that buy Russian oil could disrupt the global oil supply.

This comes after Russia carried out its largest air attack of the Ukraine war over the weekend, which set fire to a government building in Kyiv and killed at least four people, according to Ukrainian officials.

On Sunday, Donald Trump said that several European leaders would visit the U.S. to talk about how to solve the conflict.

Over the weekend, the investment bank Goldman Sachs released a note saying it expects a slightly larger surplus of oil in 2026. They believe that increased oil production in the Americas will be greater than the decrease in supply from Russia and the stronger demand worldwide. Goldman Sachs kept its oil price forecast for 2025 the same, and for 2026, it predicts the average price for Brent crude to be $56 a barrel and for West Texas Intermediate crude to be $52 a barrel.

OPEC + Production Increases as Saudi Arabia Strategy Pivot Continues

OPEC+, a group of major oil producers led by Saudi Arabia, announced a surprise plan to increase oil production. Although this might seem like a risk to a market that already has too much oil, the actual effect on prices will likely be small.

The decision is more about politics. Saudi Arabia is using this to show its leadership, gain a bigger share of the market, and strengthen its relationship with the U.S.

The group agreed to gradually undo 1.65 million barrels per day of production cuts that were supposed to last until the end of 2026. They will increase their output by 137,000 barrels per day in October. At this rate, it will take them a year to fully reverse those cuts.

Source: LSEG

While the market is expected to have a surplus of oil due to increased production from countries like the U.S. and Argentina, the actual amount of new oil added by OPEC+ will probably be less than announced. This is because most members are already producing as much as they can.

However, Saudi Arabia is a major exception. It has a lot of extra production capacity, unlike Russia, which is limited by sanctions. This puts Saudi Arabia in a strong position to increase its market share, especially from U.S. oil companies that may slow down production as prices fall.

This pivot by Saudi Arabia has been something which has been building over the past few months. The strategy does seem to be a sound one and time will tell whether the Saudis will reap the benefits.

For now though, this move may keep further Oil price gains in check as oversupply concerns also remain a concern.

WTI Oil Daily Chart, September 8, 2025

From a technical analysis standpoint, Oil is eyeing a recovery after last week's selloff.

However, the fundm=amentals might continue to keep a prolonged rally in check as uncertainties continue to dominate the agenda.

Immediate resistance rests at the 100-day MA which rests at 64.65 before the 66.15 and 67.30 handles come into focus.

A move lower from current prices, could bring last week's swing low around 61.50 before the 60.70 and the YTD low at 55.10 come into focus.

WTI Oil Daily Chart, September 8, 2025

Source: TradingView (click to enlarge)

Client Sentiment Data

Looking at OANDA client sentiment data and market participants are long on WTI with 89% of traders net-long. I prefer to take a contrarian view toward crowd sentiment and thus the fact that so many traders are long means WTI prices could decline in the near-term.

Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

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