WTI steadies under $61.50 as market digests lower than expected OPEC+ output hike

• WTI US Oil stabilizes around $61.10, reflecting a confident yet cautious market tone.
• Oil prices rise after the OPEC+ announces a modest output increase of 137,000 barrels per day for November.
• Expectations of interest rate cuts by the US Federal Reserve support projected energy demand.

West Texas Intermediate (WTI) US Oil price hovers below $61.50 on Monday, up 0.9% for the day, after the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, decided to raise production by only 137,000 barrels per day (bpd) starting in November. This increase, identical to October's adjustment, came in below market expectations, helping to support Oil prices.

Société Générale noted that "Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman confirmed on Sunday (in a 9-minute meeting with no objections) their intention to collectively increase production by 137kbd in November," interpreted by markets as a sign that spare production capacity remains limited. Analysts pointed out that traders had priced in a larger increase, which helped explain the positive price reaction.

The OPEC+ statement said the decision was based on "current healthy market fundamentals," characterized by low inventories and a steady global demand outlook. The group added that it could pause or reverse the adjustment if economic conditions worsen. OPEC+ had already reversed a 2.2 million bpd output cut ahead of schedule and began unwinding an additional 1.65 million bpd reduction by the end of September.

At the same time, expectations of monetary easing by the Federal Reserve (Fed) are indirectly supporting Oil prices. The CME FedWatch tool shows a 95% chance of a rate cut in October and an 83% chance of another in December. Fed Governor Stephen Miran reiterated that the central bank still has significant room to lower rates toward a neutral level, adding that he hopes to have the needed data by the October Fed meeting.

This combination of controlled supply and prospects of a more accommodative monetary policy strengthens risk appetite across commodity markets. However, caution is needed amid ongoing geopolitical tensions, particularly Ukraine's attacks on Russian energy infrastructure, which could add another layer of volatility to Oil prices in the coming weeks.

WTI technical analysis: Crude Oil hovers without direction after the initial jump

WTI US Oil 4-hour chart. Source: FXStreet.

The price of WTI Oil climbed to an intraday peak of $61.85 on Monday, breaking through resistance at $61.23. However, the bullish impulse didn't last, and the price is now back around the $61.23 level at the time of writing.

The pullback also remains contained, leaving WTI without a clear intraday trend after the bullish gap at the Asian open.

The daily range between $60.82 and $61.85 thus provides the immediate support and resistance levels.

On the downside, Crude Oil could test the October 2 low at $60.22, while on the upside, the 100-period Simple Moving Average (SMA) on the 4-hour chart, currently at $62.96, could be tested.