Oil price rises after Opec+ pauses oil output hikes amid glut fears – business live

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Tax rises and drop in investment predicted to limit UK growth

Phillip Inman

The prospect of looming tax rises and a fall in business investment will restrict the UK’s economic growth rate next year to less than 1%, according to a health check of the economy by a leading consultancy this morning.

With less than four weeks before Rachel Reeves delivers her budget on 26 November, the EY Item Club has downgraded Britain’s growth for next year, indicating that the economy will continue to expand at a sluggish pace, limiting tax receipts and the chancellor’s financial room for manoeuvre.

Morgan Stanley raises oil price forecast after OPEC+ pauses output hikes

Morgan Stanley has raised its near-term forecast for crude oil prices following OPEC+’s decision to pause production hikes.

The Wall Street bank said on Monday it was lifting its Brent estimate to $60 a barrel for the first half of 2026, up from $57.50, Bloomberg reports, after Opec and its allies said yesterday they plan to halt output increases in the first quarter of next year.

Morgan Stanley analysts explained:

“Even if the OPEC announcement does not change the mechanics of our production outlook, it does send an important signal.

“With OPEC involvement, volatility is reduced.”

Introduction: Opec+ to pause oil output rises next year

Jillian Ambrose

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The oil price is rising after the world’s biggest oil producers agreed to pause their planned oil production hikes in the first months of next year, to assuage fears that the global market may become oversupplied with crude.

At a meeting of the Organization of Petroleum Exporting Countries (Opec) and its allies on Sunday, led by Saudi Arabia and Russia, energy ministers agreed to nudge the cartel’s exports up by 137,000 barrels a day in December, before halting any further rises in January, February and March.

The decision marks a change of policy from the eight-strong group which has increased its production quota by almost 3m barrels of crude a day over the past year. The group has opted to slow its growth in recent months to avoid a collapse in oil prices amid growing concerns of a market oversupply.

“OPEC+ is blinking — but it’s a calculated blink,” said Jorge Leon from Rystad, adding:

“Sanctions on Russian producers have injected a new layer of uncertainty into supply forecasts, and the group knows that overproducing now could backfire later.”

This morning, Brent crude has gained 0.75% to $65.25 per barrel, with US crude up a similar amount to $61.44 per barrel.

Oil prices fell to a five-month low of about $60 a barrel on 20 October on concerns that a glut was building in the market - but prices then recovered following a raft of sanctions against Russian oil barrels and a thawing of trade relations between the US and China.