Oil prices stabilized on Wednesday after two days of declines as investors weighed OPEC+’s plans for larger production increases next month and the implications of the US government shutdown, which could impact economic activity and fuel demand.
Sources say OPEC+ could increase production by up to 500,000 barrels in November.
Brent crude futures for December delivery rose 25 cents to $66.28 a barrel by 06:43 GMT. WTI crude rose 22 cents to $62.59 a barrel.
On Monday, Brent and WTI fell more than 3%, posting their sharpest daily declines since August 1. Both fell another 1.5% on Tuesday.
The weakness stemmed largely from supply-side developments. OPEC’s plans to gradually increase production are fueling market concerns about a potential oversupply. Saudi Arabia is trying to regain market share.
However, OPEC stated in a post on X that media reports about plans to increase production by 500,000 bpd were misleading.
Crude oil inventories fell by 3.67 million barrels in the week ending September 26, according to market sources citing American Petroleum Institute (API) estimates on Tuesday.
The sources noted that gasoline inventories increased by 1.3 million barrels compared to the previous week, while distillate inventories increased by 3 million barrels.
Additional pressure on prices came after the industry report showing that US crude oil inventories were falling, while gasoline and distillate inventories were rising. While US crude oil inventories were trending down, the pace of declines slowed, softening the upward trend.
The U.S. government halted most of its operations on Wednesday after deep partisan divisions prevented Congress and the White House from reaching a funding agreement.
Agency officials warned that the 15th government shutdown since 1981 would halt the release of the closely watched September jobs report, slow air travel, suspend scientific research, cut U.S. military salaries, and furlough 750,000 federal employees for $400 million per day.
Data on factory activity in Asia, the world’s largest oil-consuming region, also fueled concerns about fuel demand.
Surveys released Wednesday showed that manufacturing activity contracted in most major economies in September, as weak Chinese demand, weak U.S. growth, and looming U.S. tariffs increased pressure on the region.