By Arathy Somasekhar

(Reuters) -Oil prices climbed nearly 3% on Monday on OPEC+’s decision for a month’s delay in plans to increase output, while investors also focused on the U.S. presidential election.

Brent futures were up $1.98, or 2.7%, at $75.08 a barrel. U.S. West Texas Intermediate (WTI) crude rose $1.98, or 2.85%, to $71.47. Last week, Brent declined about 4%, while WTI fell around 3%.

On Sunday, OPEC+ said it would extend its output cut of 2.2 million barrels per day (bpd) for another month in December, with an increase already delayed from October because of falling prices and weak demand.

OPEC+, the Organization of the Petroleum Exporting Countries plus Russia and other allies, had been due to increase monthly output by 180,000 bpd from December.

The extension through the entire fourth quarter of 2024 “casts doubt on the group’s commitment (or wherewithal) to return supply at all” in 2025, said Walt Chancellor, an energy strategist at Macquarie, adding that the announcement may allay some fears of a renewed OPEC+ “price war.”

OPEC remains very positive on demand for oil in both the short and long term, Secretary General Haitham Al Ghais said on Monday.

French oil major TotalEnergies forecast global oil demand will peak after 2030 in its two most likely energy transition scenarios in its annual energy outlook report.

Meanwhile, the CEO of Italian energy company Eni said that OPEC+ oil supply cuts and recent efforts to unwind them had increased volatility in energy markets and hampered investment in new production.

OPEC oil output rebounded in October as Libya resolved a political crisis, a Reuters survey found. In the previous month output was at its lowest this year. A further Iraqi effort to meet its cuts pledged to the wider OPEC+ alliance limited the gain.

Iran has approved a plan to increase oil production by 250,000 barrels per day, the oil ministry’s news website Shana reported on Monday. Libya’s oil production is nearing 1.5 million bpd, the country’s National Oil Corporation (NOC) said.

POLITICAL CRISIS

U.S. Democratic presidential nominee Kamala Harris and Republican Donald Trump remain virtually tied in opinion polls ahead of Tuesday’s Election Day, and the winner might not be known for days after voting ends.

Investors also watched for any escalation in Middle East tensions.

On Thursday, U.S. news website Axios said Israeli intelligence suggested Iran was preparing to attack Israel from Iraq within days, citing two unidentified Israeli sources.

“Middle East tensions are once again on the forefront as traders await the Iranian response attack,” said Dennis Kissler, senior vice president of trading at BOK Financial.

Analysts expect draws this week in gasoline and distillate inventories, while crude stocks are estimated to rise. U.S. gasoline stocks fell to their lowest in two years in the week to Oct 25.

Markets were also watching a new tropical storm that was forecast to form on Monday in the Caribbean and threaten offshore oil production along the Gulf of Mexico.

Shell said it was moving non-essential personnel from six platforms, adding it currently expects no other impacts on its production across the Gulf of Mexico.

Investor focus this week will be on the U.S. Federal Reserve as economists expect interest rates to be cut by 25 basis points on Thursday, and on China, where the Standing Committee of the National People’s Congress meets and is expected to approve additional stimulus to boost the slowing economy.

(Reporting by Arunima Kumar in Bengaluru, Colleen Howe in Beijing and Siyi Liu in Singapore; Additional reporting by Paul Carsten in London; Editing by Clarence Fernandez, Mark Potter, Ed Osmond and David Gregorio)

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