Oil prices were relatively stable on Thursday (November 13) after falling about 4% in the previous session as investors weighed concerns about a global oversupply and the threat of sanctions against Russia's Lukoil.

Brent crude futures rose 30 cents, or 0.5%, to $63.01 a barrel. U.S. West Texas Intermediate crude rose 20 cents, or 0.3%, to $58.69 a barrel, after falling 4.2% on Wednesday.

"Oil prices around $60/barrel will receive considerable support, especially given the potential for short-term disruptions to Russian export flows once tighter sanctions are imposed," said Suvro Sarkar, head of the energy sector team at DBS Bank.

The U.S. has imposed sanctions on Lukoil as part of its efforts to bring the Kremlin to peace talks regarding Ukraine. The sanctions prohibit transactions with the Russian company after November 21.

Price gains were tempered as a report from the Energy Information Administration (EIA) showed a larger-than-expected increase in U.S. crude oil stocks, while gasoline and distillate inventories fell less than expected last week.

Crude oil inventories rose by 6.4 million barrels to 427.6 million barrels in the week ending November 7, according to the EIA, compared with analysts' expectations in a Reuters poll for a 1.96 million-barrel increase.

The American Petroleum Institute (API) said on Wednesday that U.S. crude oil stocks rose by 1.3 million barrels in the week ending November 7, according to market sources.

Prices fell more than $2 per barrel on Wednesday after the Organization of the Petroleum Exporting Countries (OPEC) said global oil supply would slightly exceed demand in 2026, a further shift from the group's previous deficit projections.

"The recent price weakness appears to be driven by OPEC's revised 2026 supply-demand balance forecast in its monthly report, which confirms the group now acknowledges the possibility of a supply glut in 2026, in contrast to its more optimistic stance previously," said DBS's Sarkar.

OPEC said it expects a supply surplus next year due to broader production increases by OPEC+, a producer group that includes OPEC members and allies like Russia.

The International Energy Agency (IEA) raised its global oil supply growth forecast for this year and next in its monthly oil market report on Thursday, signaling a larger surplus in 2026.

The US Energy Information Administration (EIA) also stated in its Short-Term Energy Outlook on Wednesday that US oil production is expected to reach a record high this year than previously forecast. Global oil inventories will rise through 2026 as production increases faster than demand for petroleum fuels, adding pressure on oil prices, the EIA added.

The U.S. government is expected to resume operations on Thursday after the longest shutdown in U.S. history that disrupted air traffic, cut food aid for low-income Americans, and forced more than 1 million workers to go unpaid for more than a month.

"The return of the government will help support demand in the near term. We should anticipate better demand from those returning to work, expectations of holiday travel returning to normal, and of course, the holiday shopping season is ready to begin," said Carl Larry, sales manager for trading and risk at Enverus. (alg)

Source: Reuters