A US government shutdown fed worries about the global economy, dampening the crude oil market on Wednesday, as prices closed lower.
Brent crude futures fell by 68 cents or 1.0 per cent to settle at $65.35 a barrel, and the US West Texas Intermediate (WTI) crude futures declined by 59 cents or 0.9 per cent to $61.78 per barrel.
The US government shut down much of its operations on Wednesday as deep partisan divisions prevented Congress and the White House from reaching a funding deal.
According to Reuters, government agencies have warned this would halt the release of the closely watched September employment report, among other things.
The White House warned that worker layoffs are imminent as the first day of the government shutdown unfolded, even as Vice President JD Vance insisted no final decisions have been made.
Also, while traders expected more oil supply to come on the market with a planned output boost by the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ next month.
OPEC+ reportedly plans to boost production in November by about the same as the 500,000 barrels per day hike in September, even as US and Asian demand start to decline.
The producers wrote on X that media reports of plans to raise output by 500,000 barrels per day were misleading.
OPEC said in a statement on Wednesday that a 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 before the wider group meets on Sunday, October 5.
The US Energy Information Administration (EIA) said energy firms added 1.8 million barrels of crude into inventories during the week ended September 26. A day before, the American Petroleum Institute (API) had reported 3.7 million barrels draw for the week.
In Asia, the world’s biggest oil-consuming region, data on factory activity added to concerns about fuel demand, as manufacturing activity contracted across most major economies in September.
Also, in Russia, Deputy Prime Minister Alexander Novak said the situation with the supply of fuel on the domestic market is under control on the whole. This occurs while some regions are experiencing shortages of the fuel following Ukraine’s attacks on its energy infrastructure.