Monday saw a little increase in oil prices as major producers Saudi Arabia and Russia declared they would continue with more voluntary reductions in oil output until the end of the year, keeping supply limited as investors anticipated more stringent U.S. sanctions against Iranian oil.

By 0700 GMT, Brent oil futures had increased by 55 cents, or 0.65%, to $85.44 per barrel, while U.S. West Texas Intermediate crude had risen by 63 cents, or 0.78%, to $81.14 per barrel.

According to a Ministry of Energy source, Saudi Arabia affirmed that it will carry out its further voluntary cut of 1 million barrels per day (bpd) in December to maintain output at about 9 million bpd. Analysts anticipated Saudi Arabia’s move.

Additionally, Russia declared that it will carry out an extra voluntary 300,000 barrel per day supply reduction from its exports of petroleum products and crude oil through the end of December. The first quarter of 2019 will see a surplus in the oil market, according to ING analysts’ statement, “which may be enough to convince the Saudis and Russians to continue with cuts.”

Last week, the Brent and WTI contracts saw their second consecutive weekly decline, falling almost 6% as the geopolitical risk premium decreased as U.S. officials met with regional leaders to reduce the possibility that the Israel-Hamas battle might spark a more significant Middle East conflict.

Suvro Sarkar, a Singapore-based DBS analyst, stated that “the market is not pricing in too much geopolitical risk at current levels, so that remains a key upside risk.”

Investors are keeping a close eye on more economic data from China this week following the release of dismal October industrial statistics last week by the second-largest oil user in the world. Tony Sycamore, an I.G. analyst in Sydney, predicts that will influence this week’s oil prices. Middle Eastern news stories and technical charts will influence this week’s oil prices.

He also said that to prevent prices from falling to the August low of $77.59, WTI has to maintain its strength above the $80 per barrel support level early this week. After the U.S. payroll report on Friday came in less than predicted, Sarkar predicts that Brent will remain sustained at $80-85 a barrel, citing the continuation of supply reduction, the halt of rate rises, and a declining U.S. currency.

The US House of Representatives passed a plan to strengthen sanctions on Iranian oil on Friday. If it becomes law, it will impose restrictions on foreign ports and refineries that handle oil sent from Iran.

Analysts are still keeping an eye on whether the proposed law will have an impact on Iran’s oil exports, according to Sarkar of DBS. China may still be able to acquire Iranian oil since such sanctions frequently have exemptions for national security.

According to Baker Hughes’ weekly report released on Friday, the number of oil rigs in the U.S. dropped by 8 to 496 last week, the lowest level since January 2022. Baker Hughes provides energy services.