Oil flat amid OPEC+ output hike, supply glut fears
Oil prices steadied on Tuesday as investors weighed a smaller-than-expected increase to OPEC+ output in November against signs of a potential supply glut.
Brent crude futures closed down 2 cents, or 0.03%, to $65.45 a barrel. U.S. West Texas Intermediate crude settled up 4 cents, or 0.06%, to $61.73.
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Both contracts settled more than 1% up in the previous session after the Organization of the Petroleum Exporting Countries plus Russia and some smaller producers, together known as OPEC+, decided to increase collective oil production by 137,000 barrels per day, starting in November.
The move was in contrast to market expectations for a more aggressive increase, a sign that the group remains cautious in light of predictions for a global supply surplus in the fourth quarter as well as next year, said ING analysts.
Market sentiment remains subdued, in particular after Saudi Arabia opted to keep the official selling price of its flagship crude to Asia unchanged, defying analyst expectations for an increase, StoneX analyst Alex Hodes said in a note on Tuesday.
Meanwhile, the Abu Dhabi National Oil Company has set the November official selling price of its benchmark Murban crude at $70.22 a barrel, it said on Tuesday, up from October’s OSP of $70.10/bbl.
On the demand side, India’s fuel demand rose by 7% year-on-year in September, according to data from the Petroleum Planning and Analysis Cell of the country’s oil ministry.
On the supply side, U.S. oil production is expected to hit a larger record of 13.53 million bpd this year, up from a prior forecast of 13.44 million bpd, the Energy Information Administration said on Tuesday.
Source: Reuters
