NEW YORK: Oil prices fell to a 17-week low on Wednesday, down for a third straight day on a U.S. government shutdown fed worries about the global economy, while traders expected more oil supply to come on the market with a planned output boost by OPEC+ next month.
Brent crude futures fell 72 cents, or 1.1%, to $65.31 a barrel at 10:39 a.m. EDT (1439 GMT). U.S. West Texas Intermediate (WTI) crude fell 68 cents, or 1.1%, to $61.69.
Brent was headed for its lowest settlement since June 4 and WTI for its lowest since May 30.
U.S. gasoline futures were on track for their lowest close since September 2024.
Oil slips as OPEC+ plan adds to expectations of supply surplus
Traders expect OPEC+ to boost production in November by about the same as the 500,000 barrels per day hike in September, even as U.S. and Asian demand start to decline, Rystad analyst Janiv Shah said.
OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allied producers like Russia, could agree to raise oil production by up to 500,000 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 on X that media reports of plans to raise output by 500,000 bpd were misleading.
U.S. oil prices were also pressured by a bigger-than-expected increase in U.S. crude inventories last week.
The U.S. Energy Information Administration (EIA) said energy firms added 1.8 million barrels of crude into inventories during the week ended September 26, far exceeding the 1.0-million-barrel build analysts forecast in a Reuters poll.
On Tuesday, sources said the American Petroleum Institute trade group had reported a 3.7-million barrel draw for the week.
“Crude stocks rose following a drop in exports, which were not as hot and could signal some weak demand … we already had a pretty big sell off on the government shutdown and expectations that that could slow the economy and hurt demand,” said Phil Flynn, a senior analyst at Price Futures
Group.
US government shutdown
The U.S. government shut down much of its operations on Wednesday as deep partisan divisions prevented Congress and the White House from reaching a funding deal. Government agencies have warned this would halt the release of the closely watched September employment report, among other things.
U.S. private payrolls unexpectedly fell in September, suggesting a weakening in labor market conditions.
In Asia, the world’s biggest oil-consuming region, data on factory activity added to concerns about fuel demand, as manufacturing activity contracted across most major economies in September.
Focus was also shifting to the supply and export disruption in Russia due to Ukrainian assaults, PVM Oil Associates’ analyst Tamas Varga said.
Russian Deputy Prime Minister Alexander Novak said the situation with the supply of fuel on the domestic market is under control on the whole, while some regions are experiencing shortages of the fuel.
Elsewhere in Russia, firefighters brought a fire under control at a major oil refinery in the Yaroslavl region northeast of Moscow, the local emergencies ministry said on Wednesday. The officials said the fire had nothing to do with Ukrainian drones.
The next round of talks between the U.S. and Russia aimed at improving relations could take place before the end of autumn, the state TASS news agency reported Russian Deputy Foreign Minister Sergei Ryabkov as saying.
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