Oil prices steady after sharp losses as OPEC+ output hike and U.S. shutdown weigh
Oil prices stabilized on Wednesday after two straight days of declines, as traders assessed OPEC+ output plans and the economic risks of a U.S. government shutdown.
Brent crude futures for December rose 28 cents to $66.31 a barrel by 05:00 GMT, while U.S. West Texas Intermediate (WTI) crude gained 26 cents to $62.63 a barrel.
Both benchmarks had dropped sharply earlier in the week. Brent and WTI fell more than 3% on Monday, their steepest daily loss since August 1, followed by an additional 1.5% drop on Tuesday.
OPEC+ production plans add pressure
Market weakness has been driven largely by supply expectations. OPEC+ is discussing a production hike of up to 500,000 barrels per day (bpd) in November—triple the October increase—as Saudi Arabia aims to boost market share, according to sources.
Some members are considering a smaller increase of 274,000 to 411,000 bpd. OPEC later stated that reports of a 500,000 bpd hike were “misleading.”
Sugandha Sachdeva of SS WealthStreet said the gradual return of OPEC supply raised concerns of a potential surplus in the oil market.
U.S. inventories and government shutdown
U.S. crude stockpiles fell by 3.67 million barrels in the week ending September 26, according to American Petroleum Institute data. However, gasoline inventories rose by 1.3 million barrels and distillate inventories jumped 3 million barrels.
Sachdeva noted that while U.S. crude inventories remain on a downtrend, the pace of drawdowns has slowed, tempering bullish momentum.
Meanwhile, the U.S. government entered its 15th shutdown since 1981. The closure will delay the release of key data, including the September employment report, and disrupt several sectors from air travel to military pay. Analysts estimate the shutdown costs about $400 million per day.
Weak Asian manufacturing outlook
Concerns over fuel demand also grew after surveys showed factory activity contracted across most major Asian economies in September. Weak Chinese demand, slowing U.S. growth, and looming tariff risks all weighed on the region, the world’s largest oil-consuming market.
