Oil climbs the most in a month as OPEC+ signals it may delay a planned production hike

• Oil surged as much as 4.1% on Tuesday, its largest gain in nearly a month.
• The move came as OPEC+ members weighed a potential delay to its planned January easing of oil production cuts.
• OPEC has been signalling that it and Russia would add an additional 2 million barrels a day to oil markets early next year.
• But given the weak demand outlook for oil due to the COVID-19 pandemic, OPEC+ oil producers are rethinking their supply strategy in order to boost prices.
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Oil prices surged the most in nearly a month on Tuesday, as OPEC and Russia weighed a possible delay to their planned easing of oil production cuts, according to a Bloomberg report.

WTI Crude Oil surged as much as 4.1% in Tuesday trading to around $38 per barrel, its biggest gain since a 4.2% spike higher on October 6. Prices remain about 10% off summer highs, but well above April's low of $16.94.

OPEC and Russia have been signalling that they would add an additional 2 million barrels of oil a day to energy markets beginning early next year. But with a slow recovery in oil demand due to the COVID-19 pandemic, the easing of oil production cuts is now being reconsidered.

Now, demand for oil may not come back until next year. Countries like Germany, France, and the UK are entering a phase of "lockdown-lite" orders that limit the movement of people to help contain the spread of the virus as new cases surge.

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Air traffic, though higher than the worst levels seen during the height of the pandemic this past Winter, is still well below pre-pandemic levels, based on TSA daily screenings at airports across the country. A strong recovery in air traffic could help lift demand for oil, but that has yet to materialize.

On top of talks of a delay in easing production cuts, another potential route taken by OPEC+ members could be to deepen their current production cuts to help prop up oil prices, but those talks are not a base case, Bloomberg reported, citing people familiar with the matter.

No final decision has been made by OPEC and Russia, but that hasn't stopped traders from anticipating the potential change in OPEC's policy, helping send oil higher in Tuesday trades.