Oil pauses as markets assess OPEC+ plans, demand concerns

LONDON: Oil prices steadied on Wednesday after falling for two days as investors weighed OPEC+ plans for a larger output hike next month while data from the US and Asia showed signs of demand waning.

Brent crude futures for December delivery rose 6 cents to $66.09 a barrel by 0835 GMT.

US West Texas Intermediate crude gained 4 cents to $62.41 a barrel.

On Monday, Brent and WTI both settled more than 3% lower, their sharpest daily declines since August 1. On Tuesday, they each fell 1.5% further.

“After two days of sell-off, triggered by reports of OPEC+ hike and the resumption of Kurdish oil export, focus is shifting back to the supply and export disruption in Russia due to continuous and successful Ukrainian assaults,” said PVM Oil Associates’ analyst Tamas Varga.

The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, could agree to raise oil production by up to 500,000 barrels per day (bpd) in November, triple the increase made for October, as Saudi Arabia seeks to reclaim market share, three sources familiar with the talks said.

However, OPEC wrote in a post on X that media reports of plans to raise output by 500,000 bpd were misleading.

In the latest update on attacks on Russian energy infrastructure from Ukraine, Russia has imposed a partial ban on diesel exports and extended an existing gasoline export ban until the end of the year, the government said on Tuesday.

Meanwhile in the US, an industry report showed US crude stockpiles fell while gasoline and distillate inventories rose in the week ended September 26, according to market sources citing American Petroleum Institute estimates on Tuesday.

“While US crude inventories have been on a declining trend, the pace of drawdowns has slowed, tempering bullish sentiment,” Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm, said.

The US government shut down much of its operations on Wednesday as deep partisan divisions prevented Congress and the White House from reaching a funding deal – which government agencies have warned would halt the release of a closely watched September employment report, amongst other things.

Data on factory activity in Asia, the world’s biggest oil-consuming region, also added to concerns about fuel demand, as manufacturing activity contracted across most major economies in September.