WASHINGTON (dpa-AFX) - Crude oil declined sharply on Tuesday, extending yesterday's losses, as excess supply concerns continue to linger both from Iraq's oil exports to Turkey and the anticipated production increase by the OPEC+ alliance.
WTI Crude Oil for November delivery was last seen trading down by $1.08 (or 1.70%) at $62.37 per barrel.
According to a Reuters report, in order to regain more market share, the OPEC+ alliance is considering increasing oil production by 411,000 barrels per day for November at its Sunday, October 5, meeting.
Traders are concerned that if the reports are true, the size is three times more than the earlier-reported 137,000 bpd increase the cartel had agreed for October, which sparked concerns of surplus oil to the market.
However, in a statement released today, the OPEC Secretariat emphasized that discussions among relevant ministers regarding the upcoming meeting have not yet begun.
Following a recent agreement between Iraq's federal government, the Kurdistan Regional Government, and foreign oil producing companies in the region, oil exports from the semi-autonomous Kurdistan via the Iraq-Turkey pipeline have resumed since September 27, after nearly a three-year hiatus.
It is reported that 'Kirkuk' crude oil had arrived at Ceyhan terminal of Turkey at the rate of 150,000 bpd, which is short of the agreed minimum volume by 80,000 bpd.
Iraq's state oil marketer Somo will oversee the sale of exported crude.
The efforts to restart oil trade, which has been pushed by the U.S., will now allow 180K to 190K bpd of crude to flow to Turkey.
The U.S. is planning to bring up to 230,000 bpd to the international market, competing with the OPEC+ alliance's plan to gain market share.
So far, OPEC+ has reportedly been pumping 500,000 bpd less than its targeted production hike.
In the ongoing Russia-Ukraine war, Ukraine targeted petrochemical refineries last week, causing Russia to curb its oil exports. Russia retaliated with aerial attacks on Ukraine.
Following this, Ukrainian President Volodymyr Zelenskyy has sought for military assistance from the U.S. which the U.S. is currently considering.
To end the Israel-Palestine crisis, U.S. President Donald Trump announced a 20-point peace deal for Gaza according to which Israel will withdraw from Palestine in phases. Hamas is yet to express consent for this peace deal.
Israeli Prime Minister Benjamin Netanyahu has warned that if Hamas rejects this proposal, Israel will finish the job by itself.
The U.S. government is facing a shutdown threat as the discussions between the Republicans and Democrats for passing a bill to extend funding that will help run the government did not end cordially. Both sides were unwilling to budge from their positions.
Traders feel that a prolonged shutdown could result in low demand for oil and energy.
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