Oil prices edged lower on Monday (September 22nd) as oversupply concerns outweighed geopolitical tensions in Russia and the Middle East. Brent crude futures fell 24 cents, or 0.4%, to $66.44 a barrel at 11:01 a.m. ET (15:01 GMT). Brent has traded between $65.50 and $69 a barrel since early August.

The U.S. West Texas Intermediate crude contract for October, which expires on Monday, was at $62.49 a barrel, down 19 cents, or 0.3%. The more actively traded second-month contract fell 26 cents, or 0.5%, to $62.12.

"Traders are again focusing on the possibility of an imminent oversupply in the global oil market unless the U.S. and the European Union can agree on tighter tariffs on countries buying Russian crude," said Dennis Kissler, senior vice president of trading at BOK Financial.

Iraq, OPEC's second-largest producer, has increased oil exports under the OPEC+ agreement, according to SOMO, the state oil marketing company. SOMO also estimates September exports will range between 3.4 million and 3.45 million barrels per day.

Kuwait's crude oil production capacity has reached 3.2 million barrels per day (bpd), Oil Minister Tariq Al-Roumi said in an interview with local newspaper Al Qabas, the highest level in more than 10 years.

U.S. equities, which often move in tandem with oil prices, slumped on Monday amid a visa crackdown and speculation about the Fed's next interest rate move. Federal Reserve officials cast doubt on the need for further interest rate cuts on Monday, given that inflation remains above the central bank's 2% target and the labor market remains near full employment. Lower borrowing costs typically boost oil demand.

Tensions have risen in the Middle East after several Western countries recognized the state of Palestine, and in Eastern Europe after Estonia said Russian fighter jets had entered its airspace without permission on Friday. However, none of these developments have resulted in any immediate oil supply disruptions.

Brent and WTI closed down more than 1% on Friday, marking a slight decline last week as concerns about large supplies and falling demand weighed on sentiment.

"The oil market's outlook is that global oil demand will decline from the third quarter to the fourth quarter and back to the first quarter of 2026. At the same time, OPEC+ production is on track to increase," said SEB analysts. "The big question, of course, is whether China will amass a growing surplus or whether oil prices will be pushed lower into the 50s. We believe the latter."

Iraq has also given preliminary approval to a plan to resume oil exports via pipeline from the semi-autonomous Kurdistan region via Turkey, sources told Reuters. (alg)

Source: Reuters