Oil prices stabilized on Wednesday (October 1) after two days of declines as investors considered OPEC+ plans for a larger production increase next month, while data from the US and Asia showed signs of declining demand.

Brent crude for December delivery rose 6 cents to $66.09 a barrel at 08:35 GMT. US West Texas Intermediate crude rose 4 cents to $62.41 a barrel. On Monday, Brent and WTI both closed down more than 3%, their sharpest daily declines since August 1. On Tuesday, both fell 1.5% each.

"After two days of selling, triggered by reports of an OPEC+ production increase and the resumption of Kurdish oil exports, the focus has shifted back to supply and export disruptions in Russia due to the ongoing and successful Ukrainian offensive," said PVM Oil Associates analyst Tamas Varga.

The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, could agree to increase oil production by 500,000 barrels per day (bpd) in November, tripling the increase made in October, as Saudi Arabia seeks to regain market share, three sources familiar with the talks said. However, OPEC wrote in a post on X that media reports of plans to increase production by 500,000 bpd were misleading.

In the latest update on attacks on Russian energy infrastructure from Ukraine, Russia has imposed a partial ban on diesel exports and extended an existing ban on gasoline exports until the end of the year, the government said on Tuesday.

Meanwhile in the US, an industry report showed US crude oil stocks fell while gasoline and distillate inventories rose in the week ending September 26, according to market sources citing estimates by the American Petroleum Institute on Tuesday. "Although US crude inventories are showing a downward trend, the pace of drawdown has slowed, dampening bullish sentiment," said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm.

The U.S. government shut down most of its operations on Wednesday as deep partisan divisions prevented Congress and the White House from reaching a funding deal—which government agencies said would hamper the release of the closely watched September jobs report, among other issues. Factory activity data in Asia, the world's largest oil-consuming region, also added to concerns about fuel demand, as manufacturing activity contracted in most major economies in September. (alg)

Source: Reuters