SINGAPORE: Oil prices edged higher on Thursday, breaking a three-day losing streak and bouncing back from levels not seen in more than four months. The recovery came as traders weighed the possibility of tighter sanctions on Russian crude, although expectations of rising supply from OPEC+ next month kept gains modest.
By 0116 GMT, Brent crude futures were up 15 cents, or 0.2 percent, trading at $65.50 a barrel. US West Texas Intermediate (WTI) crude gained 14 cents, or 0.2 percent, to reach $61.92.
Both benchmarks had slid about 1 percent on Wednesday, with Brent closing at its weakest since June 5 and WTI at its lowest since May 30.
Geopolitical tensions boost buying interest
Analysts said investors began buying as WTI approached the key $60 support level. Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, noted that growing geopolitical risks and speculation over fresh sanctions on Russian oil provided additional support.
The pressure on Moscow could soon intensify. Finance ministers from the Group of Seven (G7) nations announced on Wednesday that they plan to clamp down harder on countries and companies helping Russia bypass restrictions. Reports also surfaced that the US will share intelligence with Ukraine for long-range missile strikes targeting Russian refineries, pipelines and other energy infrastructure. According to the Wall Street Journal, the move aims to choke off revenue that fuels the Kremlin’s war chest.
OPEC+ supply plans weigh on sentiment
Despite the rebound, traders remained cautious. Concerns over the global economy, stoked by the US government shutdown, tempered optimism. Market sentiment was also kept in check by signals that OPEC+ could ramp up production in November.
Sources familiar with the matter told Reuters that the alliance, led by Saudi Arabia and Russia, may agree to increase output by as much as 500,000 barrels per day, triple the modest rise planned for October. Riyadh, in particular, is reportedly eager to reclaim market share, even as demand in the US and parts of Asia shows signs of slowing.
Adding further pressure, data from the US Energy Information Administration revealed a build-up in stockpiles. Crude inventories climbed by 1.8 million barrels to 416.5 million in the week ending September 26, surpassing forecasts of a 1 million-barrel increase. Gasoline and distillate stocks also rose as refinery activity eased and consumption softened.
A market caught between risks and supply
For now, the oil market appears caught between two forces: the threat of disruption from geopolitics and sanctions, and the drag of rising supply and weaker demand. While Thursday’s uptick brought some relief, analysts say the path ahead will likely remain volatile, with any escalation in Ukraine or fresh moves by OPEC+ capable of tilting prices sharply in either direction.