Despite reports that OPEC+ plans to halt supply increases in the new year, oil prices remained relatively stable. The market is under pressure from an oversupply in Asia and weak factory data. The supply outlook and Asian factory data have influenced prices.
Brent crude futures were trading down 1 cent, or 0.02%, at $64.76 a barrel by 09:59 GMT. WTI crude was down 3 cents, or 0.05%, at $60.95.
OPEC+ agreed on Sunday to increase production by a small amount, 137,000 barrels per day (bpd), in December and to halt increases in the first quarter of next year.
Brent and WTI fell more than 2% in October, marking the third consecutive month of decline. The benchmarks fell to a five-month low on October 20.
The OPEC+ decision appears to be an acknowledgment of the large surplus facing the market, particularly early next year. However, there is still considerable uncertainty about the scale of the surplus, and this uncertainty will depend on how negatively US sanctions will impact Russian oil flows.
US sanctions imposed on Russian producers Rosneft and Lukoil, as well as attacks on Russia’s energy infrastructure due to the war in Ukraine, are playing a significant role.
Analysts are largely keeping their oil price forecasts unchanged as rising OPEC+ production and weak demand offset geopolitical risks to supply. Estimates for an oil market surplus range from 190,000 to 3 million barrels per day.
The Energy Information Administration (EIA) reported on Friday that US crude oil production rose to a record 13.8 million barrels per day in August.
Business surveys released on Monday showed that the downside for Asia’s major production centers continued in October.
Asia is the world’s largest oil-consuming region.