OPEC+ may raise output by up to 500,000 bpd in November, sources sayU.S. crude stocks down 3.67 mln bbls last week – APIU.S. govt shutdown halts key economic data releases

NEW DELHI, Oct 1 (Reuters) – 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 28 cents to $66.31 a barrel by 0500 GMT. U.S. West Texas Intermediate crude rose by 26 cents to $62.63 a barrel.

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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.

Agencies warned that the 15th government shutdown since 1981 would halt the release of a closely watched September employment report, slow air travel, suspend scientific research, withhold pay from U.S. troops and lead to the furlough of 750,000 federal workers at a daily cost of $400 million.

Data on factory activity in Asia, the world’s biggest oil-consuming region, also added to concerns about fuel demand.

Manufacturing activity contracted across most major economies in September, surveys showed on Wednesday, as weak Chinese demand, softer U.S. growth and looming U.S. tariffs piled pressure on the region.

Reporting by Mohi Narayan in New Delhi, additional reporting by Laila Kearney; Editing by Lincoln Feast and Christian Schmollinger.

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Mohi Narayan

Reports on everything from how Asia’s fuel use recovers from the fallout of COVID-19 to tracking how the global energy transition impacts refinery expansion plans and fuel supplies in the coming decades. Mohi analyzes data to produce insights into an array of topics spanning refinery operations and profitability through to global oil trade flows and fuel storage. Also, looks at the electrification of the global auto fleet and its impact on fuel supply chains, and the build-out of petrochemical capacity by refiners trying to reduce dependence on fuel sales.