Oil prices rise despite an increase in OPEC production as Russia escalates its attacks on Kiev

The global oil markets witnessed a volatile day, with prices rising by a solid 2%, despite OPEC's decision to increase production next month, but the increase pledged by the group for October is generally modest, focusing instead on the escalating geopolitical storm in eastern Europe.

Technical details: limited increase and pessimistic forecasts

The OPEC alliance has decided to increase its oil production by 137 thousand barrels per day for next October.

This increase is very modest compared to the September increase of 547 thousand barrels, and comes at a time when fears of a global supply shortage are increasing.

Analysts at Goldman Sachs point out that the actual increase expected from the alliance from September to the end of the year may not exceed 190 thousand barrels per day, due to the exhaustion of many member states of their reserve production capacity, reflecting a structural inability to meet the agreed production quotas.

The real driver is military escalation and sanctions

Behind this strong rise in prices, which brought Brent to USD 66.60 and WTI to USD 62.90 per barrel, there are two main factors:

- Russian military escalation: Moscow launched the largest aerial bombardment on Kiev since the beginning of the war three and a half years ago, targeting for the first time a government building in the heart of the Ukrainian capital.

This escalation raises market fears of a longer and deeper disruption of energy supplies, pushes speculators to buy in anticipation of possible unrest.

- The spectre of Western sanctions: US statements have increased tension, as the US president confirmed his readiness to move to the second stage of sanctions on the Kremlin.

These statements raise market fears of new restrictions that may target the Russian energy sector, one of the world's largest suppliers, which could sharply reduce global supply.