Oct 1, 2025
Oil pauses as OPEC+ increases production and attention shifts to the US government shutdown.
Oil prices stabilized on Wednesday following two days of declines as investors considered OPEC+ plans for a significant output increase next month and the effects of a U.S. government shutdown on economic activity and fuel demand.
Brent crude futures for December rose 28 cents to $66.31 a barrel by 0500 GMT, while U.S. West Texas Intermediate crude increased by 26 cents to $62.63 a barrel.
On Monday, both Brent and WTI experienced their largest daily declines since August 1, settling over 3% lower, followed by an additional 1.5% drop on Tuesday.
"The weakness is primarily due to supply-side changes, with OPEC gradually increasing production, raising market concerns about a possible supply surplus," said Sugandha Sachdeva, founder of SS WealthStreet.
OPEC+ may agree to boost oil production by up to 500,000 barrels per day in November, which would be three times the increase for October, as Saudi Arabia aims to regain market share, according to three sources familiar with the discussions.
Eight members of the group, accounting for about half of the world's oil supply, are considering an increase of 274,000 to 411,000 bpd, while a third source indicated the rise could reach 500,000 bpd.
OPEC stated on X that reports about a 500,000 bpd output increase were misleading.
Pressure on prices also came from an industry report indicating that U.S. crude stockpiles fell while gasoline and distillate inventories rose last week.
Crude stocks dropped by 3.67 million barrels in the week ending September 26, according to sources citing American Petroleum Institute estimates.
However, gasoline inventories increased by 1.3 million barrels, and distillate inventories grew by 3 million barrels compared to the previous week.
"Although U.S. crude inventories are on a downward trend, the rate of reductions has slowed, which has tempered bullish sentiment," Sachdeva noted.
The U.S. government partially shut down on Wednesday due to deep partisan divisions preventing Congress and the White House from reaching a funding agreement.
Agencies warned that this marked the 15th government shutdown since 1981, halting the release of a key September employment report, slowing air travel, suspending scientific research, withholding pay from U.S. troops, and leading to furloughs for 750,000 federal workers at a daily cost of $400 million.
Data on factory activity across Asia, the world's largest oil-consuming region, also heightened concerns about fuel demand.
Surveys released on Wednesday indicated that manufacturing activity contracted in most major economies in September, largely due to weak demand from China, softer growth in the U.S., and impending U.S. tariffs.
Brent crude futures for December rose 28 cents to $66.31 a barrel by 0500 GMT, while U.S. West Texas Intermediate crude increased by 26 cents to $62.63 a barrel.
On Monday, both Brent and WTI experienced their largest daily declines since August 1, settling over 3% lower, followed by an additional 1.5% drop on Tuesday.
"The weakness is primarily due to supply-side changes, with OPEC gradually increasing production, raising market concerns about a possible supply surplus," said Sugandha Sachdeva, founder of SS WealthStreet.
OPEC+ may agree to boost oil production by up to 500,000 barrels per day in November, which would be three times the increase for October, as Saudi Arabia aims to regain market share, according to three sources familiar with the discussions.
Eight members of the group, accounting for about half of the world's oil supply, are considering an increase of 274,000 to 411,000 bpd, while a third source indicated the rise could reach 500,000 bpd.
OPEC stated on X that reports about a 500,000 bpd output increase were misleading.
Pressure on prices also came from an industry report indicating that U.S. crude stockpiles fell while gasoline and distillate inventories rose last week.
Crude stocks dropped by 3.67 million barrels in the week ending September 26, according to sources citing American Petroleum Institute estimates.
However, gasoline inventories increased by 1.3 million barrels, and distillate inventories grew by 3 million barrels compared to the previous week.
"Although U.S. crude inventories are on a downward trend, the rate of reductions has slowed, which has tempered bullish sentiment," Sachdeva noted.
The U.S. government partially shut down on Wednesday due to deep partisan divisions preventing Congress and the White House from reaching a funding agreement.
Agencies warned that this marked the 15th government shutdown since 1981, halting the release of a key September employment report, slowing air travel, suspending scientific research, withholding pay from U.S. troops, and leading to furloughs for 750,000 federal workers at a daily cost of $400 million.
Data on factory activity across Asia, the world's largest oil-consuming region, also heightened concerns about fuel demand.
Surveys released on Wednesday indicated that manufacturing activity contracted in most major economies in September, largely due to weak demand from China, softer growth in the U.S., and impending U.S. tariffs.