Oil prices continued their upward trajectory on Tuesday after OPEC+ announced a smaller increase in November supply than anticipated, easing some concerns over potential oversupply in the market.
This morning, Brent futures gained 11 cents, or 0.17%, to $65.58 a barrel, and the WTI expanded 8 cents, or 0.13%, to $61.77 per barrel. Both contracts had climbed more than 1% in the previous session, buoyed by OPEC+’s decision to lift production by 137,000 barrels per day beginning next month.
This output increment fell short of analyst expectations for a more aggressive boost, signaling that the oil alliance — comprised of the Organization of the Petroleum Exporting Countries, Russia, and other partners — remains cautious as it navigates projections of a supply surplus for both the final quarter of this year and 2025.
KGI Securities reaffirmed its favorable outlook for commodity-related equities in light of the rebound in crude prices. The firm noted that Dubai crude had dropped 6% for the week to $64.80 per barrel last Friday, pressured by speculation that OPEC+ would ramp up output. The alliance confirmed on Sunday it would implement a 137,000-barrel-per-day increase in November, mirroring the previous month’s pace. According to KGI Securities, this development confirms OPEC+ is gradually winding down the 1.65-million-barrel-per-day cut introduced in October.
Within the refining sector, gasoline margins jumped 12% week-over-week to $12.10 a barrel, buoyed by heightened demand from Indonesia. Spreads for jet fuel and diesel grew 9% and 13%, respectively, week-over-week, reaching $20.70 and $22.70 a barrel. Both remained robust above the $20 mark, supported by Russia’s partial diesel export ban, which extends through the end of the year, as well as increased winter demand.
KGI Securities continues to express optimism for the refinery and retail oil service segments, naming Bangchak Corporation (SET: BCP) and PTT Oil and Retail Business (SET: OR) among its preferred stocks in Thailand’s energy sector.
