Oil Prices Climb as OPEC+ Keeps Tight Grip on Output Growth
Oil prices edged higher on Wednesday as investors brushed aside oversupply concerns after OPEC+ decided to limit its production increase for next month.
Brent crude futures rose 48 cents, or 0.7%, to $65.93 a barrel by 04:00 GMT. U.S. West Texas Intermediate (WTI) gained 51 cents, or 0.8%, to $62.24 a barrel. Both benchmarks had ended flat in the previous session as traders weighed signs of a possible supply glut against a smaller-than-expected OPEC+ output hike for November.
According to Emril Jamil, senior analyst at LSEG Oil Research, “The market is in price limbo, with one side worried about oversupply and the other expecting a slower production ramp-up.” Jamil added that prices are holding up as traders keep long positions, betting that restrictions on Russian crude exports will continue.
OPEC+ agreed to raise output by just 137,000 barrels per day, the smallest increase among the options discussed during the weekend meeting. Analysts at ANZ said investors are likely to ignore the impact of this modest rise until inventories begin to build in the physical market.
However, gains remain limited as concerns over Russian supply disruptions have eased. Crude shipments from Russia have stayed near a 16-month high over the past four weeks, ANZ noted.
Traders are now waiting for the latest U.S. inventory data from the Energy Information Administration (EIA), due later on Wednesday.
On Tuesday, the American Petroleum Institute (API) reported that U.S. crude stocks increased by 2.78 million barrels in the week ending October 3. In contrast, gasoline and distillate inventories declined, according to the same data.
Meanwhile, the EIA said U.S. oil production is expected to reach a new record this year, exceeding earlier forecasts.
