After OPEC+ maintains output stability and imposes a Russian price cap, oil prices increase

Oil prices increased on Monday as OPEC+ countries maintained their output targets ahead of a ban by the European Union and the implementation of a G7 price restriction on Russian oil.

At the same time, additional Chinese cities relaxed COVID-19 regulations over the weekend, which is encouraging for fuel demand in the top oil importer in the world.

Prices increased by as much as 2% earlier in the day, but further price increases have been limited for both the Brent and U.S. West Texas Intermediate (WTI) contracts.

At 09:45 GMT, WTI crude futures were up $1.40, or 1.8%, to $81.38 a barrel, while Brent crude prices were last up $1.51, or 1.8%, to $87.08 a barrel.

On Sunday, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, which includes Russia, came to an agreement to uphold its October plan to reduce output by 2 million barrels per day (bpd) from November through 2023.

According to Ann-Louise Hittle, vice president of consultancy Wood Mackenzie, "the decision... is not a surprise, given the uncertainty in the market about the impact of the EU Russia crude oil import embargo and the G7 price ceiling."

The producers' organisation also faces downside risk from China's zero COvid Policy and the likelihood for weaker global economic development.

Last week, the Group of Seven (G7) nations and Australia decided to cap the price of seaborne Russian oil at $60 per barrel.

China, the second-largest economy in the world, has seen a decline in business and manufacturing activity this year as a result of stringent controls on the coronavirus's spread.

According to Leon Li, a CMC Markets analyst based in Shanghai, continued weakness in China's economy might reverse recent increases in oil prices.

"The economic figures for China right now are still poor. Driving the demand for crude oil is difficult "said Li.