Crude oil was steadied on Tuesday as investors weighed a smaller-than-expected increase to output by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) in November against signs of a potential supply glut.
Brent crude was down by 2 cents or 0.03 per cent to $65.45 a barrel, and the US West Texas Intermediate (WTI) crude was up by 4 cents or 0.06 per cent to $61.73 per barrel.
The market continued to weigh OPEC+’s decision 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.
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 while the United Arab Emirates (UAE) set the November official selling price of its benchmark Murban crude at $70.22 a barrel, up from October’s official selling price of $70.10.
On the demand side, India’s fuel demand rose 7 per cent year-on-year in September.
The US Energy Information Administration (EIA) said on Tuesday that the country’s oil production is expected to hit a larger record of 13.53 million barrels per day this year, up from a prior forecast of 13.44 million barrels per day.
Global oil inventories are also expected to rise through next year as non-OPEC+ countries lead oil output growth, according to the EIA, putting significant downward pressure on commodity prices in the months ahead.
On its part, JPMorgan said global oil inventories, including crude stored on water, have risen every week in September, adding 123 million barrels during the month.
The American Petroleum Institute (API) estimated that crude oil inventories in the US increased by 2.780 million barrels in the week ending October 3. So far this year, net crude oil inventories have rose by just 557,000 barrels.
Gasoline (petrol) inventories fell by 1.245 million barrels in the week ending October 3, after gaining 1.3 million barrels in the week prior and distillate inventories also fell in the reporting period, losing 1.822 million barrels following the week prior’s 3.003-million-barrel gain.
Th official data from the US EIA will be due later on Wednesday.
Also, the market continue to watch developments between Russia and Ukraine which is affecting energy assets and creating uncertainty over Russian crude supply.