Oil prices steadied on Wednesday after two days of declines as investors weighed OPEC+ plans for a larger output hike next month and the outcome of a U.S. government shutdown that could impact economic activity and fuel demand.
Brent crude futures for December delivery rose 25 cents to $66.28 a barrel by 0643 GMT. U.S. West Texas Intermediate crude rose by 22 cents to $62.59 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.
"The weakness stems largely from supply-side developments, with OPEC gradually reviving production ... adding to market concerns over a potential supply overhang," Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm, said.
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.
Eight members of the group, which pumps about half the world’s oil, are considering a hike of 274,000 to 411,000 bpd, two of the sources said. A third source said the increase could reach 500,000 bpd.
OPEC wrote in a post on X that media reports of plans to raise output by 500,000 bpd were misleading.
Additional pressure on prices followed an industry report showing U.S. crude stockpiles fell while gasoline and distillate inventories rose last week.
Crude stocks fell by 3.67 million barrels in the week ended September 26, according to market sources citing American Petroleum Institute estimates on Tuesday.
Gasoline inventories, however, rose by 1.3 million barrels while distillate inventories increased by 3 million barrels from last week, the sources said.
"While U.S. crude inventories have been on a declining trend, the pace of drawdowns has slowed, tempering bullish sentiment," SS WealthStreet's Sachdeva said.
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.
Source: Reuters