Oil slumps to 16-week low on U.S. shutdown and possible OPEC+ plans
Oil prices slid for a third day in a row to a 16-week low on Wednesday as 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 68 cents, or 1.0%, to settle at $65.35 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 59 cents, or 0.9%, to settle at $61.78.
Those were the lowest closes for Brent since June 5 and for WTI since May 30.
U.S. oil production growth will stall if prices stay near $60 per barrel, as fewer drilling sites are profitable at that level, the CEO of Diamondback Energy FANG.O, one of the country’s top oil producers, said on Wednesday.
In other energy markets, U.S. gasoline futures closed at their lowest in almost a year.
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.
An OPEC+ panel stressed the need for achieving full compliance with oil output agreements and extra output cuts that some members are required to make to compensate for earlier exceeding quotas at a meeting on Wednesday, OPEC said in a statement.
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, 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.
Source : Reuters.com
