Following Sharp Losses.. Oil Prices Stabilize

SadaNews - Oil prices stabilized after declining for two consecutive days, as traders assess the possibility that the OPEC+ alliance may consider accelerating its plans to increase supplies during its meeting scheduled for the end of this week.

Brent crude for December delivery was trading near $66 per barrel, after losing about 5% in the first two sessions of the week. Meanwhile, West Texas Intermediate crude was stable above $62.

One delegate stated that the alliance will discuss increasing production in three monthly phases of 500,000 barrels per day for each phase, to regain market share, even though the OPEC organization stated in an official statement that it does not have such a plan.

The Specter of a U.S. Government Shutdown

In broader markets, traders are watching the government shutdown in the United States, following Congress's failure to pass a funding bill before the midnight deadline in Washington. U.S. stock futures retreated slightly, alongside a decline in Asian stocks.

Oil ended September down for the second consecutive month, after previous increases in supplies from OPEC+ bolstered expectations of a global surplus in the near term.

Although Chinese demand – the world's largest oil importer – has provided some support for prices in recent quarters, the International Energy Agency predicts a record supply surplus next year.

Charu Chanana, senior investment analyst at Saxo Markets in Singapore, stated: "The U.S. shutdown adds noise to the landscape, especially if it disrupts data releases, but it does not change the short-term equation of abundant supply being available." She added: "Brent still remains under pressure as the narrative of supply abundance dominates the market."

Mixed U.S. Inventory Data

Investors also assessed a mixed report from the American Petroleum Institute regarding inventories. The data showed a decrease in U.S. oil inventories by 3.7 million barrels last week, while gasoline and distillate stocks rose, adding further complexity in reading the trends.