Oil prices stabilized after falling amid OPEC+ plans and US shutdown
Kyiv • UNN
Brent and WTI crude futures rose by 28 and 26 cents respectively after two days of declines. Investors are assessing OPEC+'s plans to increase production and the consequences of the US government shutdown.
Oil prices stabilized on Wednesday after two days of decline, as investors assessed OPEC+'s plans for a more significant increase in production next month and the consequences of the US government shutdown, which could affect economic activity and fuel demand, UNN reports with reference to Reuters.
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By 05:00 GMT (08:00 Kyiv time), Brent crude futures for December delivery rose by 28 cents to $66.31 per barrel. The price of US West Texas Intermediate crude rose by 26 cents to $62.63 per barrel.
On Monday, Brent and WTI crude oil prices fell by more than 3%, which was the sharpest daily drop since August 1. On Tuesday, they fell by 1.5%.
"The weakness is mainly due to changes in supply, as OPEC gradually restores production... which exacerbates market fears of a potential oversupply," said Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, may agree to increase oil production by up to 500,000 barrels per day in November, which is three times the increase achieved in October, as Saudi Arabia seeks to regain its share.
Eight members of the group, which account for about half of the world's oil production, are considering increasing production by 274,000-411,000 barrels per day, two sources said. A third source said the increase could be 500,000 barrels per day.
OPEC wrote in a post on X that media reports of plans to increase production by 500,000 barrels per day are misleading.
Additional pressure on prices was exerted by an industry report that showed US oil inventories decreased, while gasoline and distillate inventories increased last week.
"While US crude oil inventories show a downward trend, the pace of reduction has slowed, which has softened optimistic sentiment," said Sachdeva of SS WealthStreet.
On Wednesday, the US government suspended much of its operations as deep partisan divisions prevented Congress and the White House from reaching a funding agreement.
Agencies warned that the 15th government shutdown since 1981 would halt the publication of the closely watched September employment report, slow air travel, suspend scientific research, delay paychecks for US service members, and furlough 750,000 federal workers, costing $400 million a day.
Data on industrial activity in Asia, the world's largest oil-consuming region, also fueled fears about fuel demand.
Surveys conducted on Wednesday showed that manufacturing activity declined in most major economies in September, as weak demand in China, slowing US economic growth, and looming US tariffs increased pressure on the region.
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