HOUSTON: Oil prices held largely steady on Thursday after declining around 4 percent in the previous session as investors weighed concerns about global oversupply with looming sanctions against Russia’s Lukoil.
Brent crude futures rose 30 cents, or 0.5 percent, to USD63.01 a barrel. US West Texas Intermediate crude increased 20 cents, or 0.3percent, to USD58.69 a barrel, after a decline of 4.2 percent on Wednesday.
“There should be considerable support to oil prices around USD60/bbl, especially given there could be short-term disruption to Russian export flows once stricter sanctions kick in,” said Suvro Sarkar, DBS Bank’s energy sector team lead. The US has hit Lukoil with sanctions as part of its efforts to bring the Kremlin to peace talks over Ukraine. The sanctions prohibit transactions with the Russian company after November 21. Price gains were held back as a report from the Energy Information Administration showed a larger-than-expected rise in US crude stocks, while gasoline and distillate inventories fell less than expected last week.
Crude inventories rose by 6.4 million barrels to 427.6 million barrels in the week ended November 7, the EIA said, compared with analysts’ expectations in a Reuters poll for a 1.96-million-barrel rise. The American Petroleum Institute said on Wednesday that US crude stockpiles rose by 1.3 million barrels in the week ended November 7, according to market sources. Prices fell more than USD2 a barrel on Wednesday after an Organization of the Petroleum Exporting Countries report which implied global oil supplies would slightly exceed demand in 2026, according to a Reuters calculation based on the report, a further shift from the group’s earlier projections of a deficit.
“Recent (price) weakness seems to be driven by OPEC’s revision of supply-demand balance in 2026 in its monthly report, which confirms the group is now acknowledging the possibility of a supply glut in 2026, in contrast to its more bullish stance all along,” DBS’s Sarkar said.
OPEC’s report implied a supply surplus next year if OPEC+ output remains at October’s level, according to a Reuters calculation, after OPEC+ production increases and higher supply from other producers. OPEC+ groups the OPEC members and allies like Russia. The International Energy Agency raised its global oil supply growth forecasts for this year and next in its monthly oil market report on Thursday, signalling a bigger surplus in 2026.
The US EIA also said in its Short-Term Energy Outlook on Wednesday that US oil production is expected to set a larger record this year than previously forecast.
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