Oil Steady after Smaller than Expected Boost to OPEC+ Output

16/04/1447 04:10 AST

Oil prices were steady on Tuesday as investors assessed a smaller than expected increase to OPEC+ output in November against a backdrop of possible oversupply.

Brent crude futures rose 9 cents, or 0.14%, to $65.56 a barrel by 1154 GMT. US West Texas Intermediate crude gained 8 cents, or 0.13%, to $61.77.

Oil prices are holding up, with the market looking if higher oil inventories on water will translate into rising OECD oil stocks, while preliminary data from India pointed to strong oil demand in September, said UBS analyst Giovanni Staunovo.

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 (bpd), starting in November, Reuters reported.

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.

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 (PPAC) of the oil ministry.

On the supply side, JP Morgan said that global oil inventories, including crude stored on water, have risen every week in September, adding 123 million barrels during the month.

China, meanwhile, is building oil reserves sites at a rapid clip as part of a campaign to boost stockpiles, according to public data, traders and industry experts.

Geopolitical factors have kept a floor under prices, with conflict between Russia and Ukraine affecting energy assets and creating uncertainty over Russian crude supply.

Russia's Kirishi oil refinery halted its most productive distillation unit after a drone attack and subsequent fire on October 4, with recovery likely to take about a month, two industry sources said on Monday.

Asharq Al Awsat