WASHINGTON (dpa-AFX) - Crude oil tumbled on Thursday, as concerns of oversupply have heightened due to reported plans by OPEC+ to increase production for next month along with anxiety about the long-term impact of the ongoing U.S. government shutdown, which enters the second day today.
WTI Crude Oil for November delivery was last seen trading down by $1.23 (or 1.99%) at $60.55 per barrel.
Recent reports indicated that OPEC+ may approve a 137,000 barrels per day increase in output for November in its upcoming meeting on Sunday. This has led to oversupply concerns
After yesterday's Energy Information Administration's data revealed that crude oil stocks rose by 1.79 million barrels in the week ending September 26, more than expected, worries over softening demand have surfaced.
In addition, the report showed increase by gasoline stocks by 4,125,000 barrels, distillate stocks by 578,000 barrels, and heating oil stocks by 187,000 barrels.
Russia and Ukraine have stepped up their mutual attacks. Allegedly, Russian forces conducted a strike on the Chernobyl Nuclear Power Plant. Ukraine, however, has successfully restored its function. The U.S. is weighing Ukraine's request for Tomahawk cruise missiles.
Officials from the Group of Seven advanced economies, Britain, Canada, France, Germany, Italy, Japan and the U.S., agreed to target those who are continuing to increase their purchase of Russian oil and those that are facilitating circumvention to maximize pressure on Russia to end the war.
With the U.S. urging NATO to share intelligence on long-range targets in Russia, traders are concerned that an aggressive intervention by the U.S. could escalate the situation and result in a disruption of oil supply.
In the Middle East, Hamas reviews the U.S.-backed Israel-Palestine 20-point peace proposal to end the war in Gaza. The plan's most critical element requires Hamas surrendering and disarming. U.S. President Donald Trump has already issued an ultimatum to the militants and stated that a rejection would lead them to 'hell.'
Traders are closely watching the developments as peace in Gaza could facilitate smooth oil and energy transit and any reduction in regional tensions can stabilize energy prices.
OPEC's second largest producer, Iraq, is reportedly planning to increase its oil production capacity to 5.5 million barrels per day by the end of the year, up from the current 4.4 million bpd.
After a hiatus since March 2023, Iraq on Saturday resumed crude oil exports from the semi-autonomous Kurdistan Region to Turkey via the Iraq-Turkey pipeline following a tripartite agreement between Iraq-Kurdistan-Oil producers in the region, which will now allow around 180,000 to 190,000 bpd of crude to flow to Turkey's Ceyhan port.
This arrangement has the backing of the U.S., which plans to bring up to 230,000 bpd of crude to international markets when OPEC is working to increase its market share.
In the U.S. the federal government shutdown entered its second day today. Key reports that the data-driven U.S. Federal Reserve assesses for its monetary policy decisions are slated to be delayed.
However, investors are expecting two rate cuts this year and another next year due to prevailing unemployment and after yesterday's weak ADP private payrolls data.
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