TOKYO (Reuters): Oil prices rose on Thursday, ending a three-day losing streak and bouncing back from 16-week lows, supported by the prospect of tighter sanctions on Russian crude. However, gains were limited by expectations of increased OPEC+ output next month.
Brent crude futures rose 15 cents, or 0.2%, to $65.50 a barrel by 0116 GMT, while U.S. West Texas Intermediate (WTI) gained 14 cents, or 0.2%, to $61.92. Both benchmarks fell about 1% on Wednesday, with Brent closing at its lowest since June 5 and WTI since May 30.
“Buying interest emerged as WTI neared its $60 support level, while geopolitical risks and speculation about tighter sanctions on Russian crude also lent support,” said Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment.
The Group of Seven (G7) finance ministers said they would intensify pressure on Russia by targeting buyers of Russian oil and those helping Moscow bypass restrictions. Meanwhile, the Wall Street Journal reported that the U.S. will provide Ukraine with intelligence for long-range strikes on Russian energy infrastructure, potentially hitting refineries, pipelines, and other facilities.
Still, worries about a U.S. government shutdown and signs of higher supply capped oil’s rebound. OPEC+ is considering raising production by up to 500,000 barrels per day (bpd) in November — triple the October increase — as Saudi Arabia seeks to regain market share, sources told Reuters.
At the same time, demand in the U.S. and Asia has shown signs of slowing. The U.S. Energy Information Administration reported crude inventories rose by 1.8 million barrels last week to 416.5 million, higher than analysts’ expectations of a 1 million-barrel build, as refining activity and demand softened.