Oil prices edged higher during Tuesday's Asian trade as market participants weighed a smaller-than-expected OPEC+ output hike against growing concerns about global demand and the risk of an oversupplied market.
By 2:30 pm AEST (3:30 am GMT), Brent crude futures rose 23 cents, or 0.4%, to US$65.70 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 21 cents, or 0.3%, to US$61.90.
Both benchmarks had climbed more than 1% in the previous session.
ANZ analysts noted: “Crude oil prices gained after OPEC announced a smaller than expected production rise. The oil market has been anticipating a large rise in quotas for the group's members as they met to discuss their supply agreement over the weekend.”
“This staved off fears of an even bigger surplus than the one the market is anticipating in coming months.”
OPEC+, a coalition of the Organization of the Petroleum Exporting Countries, Russia, and other allied producers, agreed on Sunday to lift its collective oil production by 137,000 barrels per day starting in November.
The move adds to more than 2.7 million barrels per day (bpd) of increases so far this year, equivalent to about 2.5% of global demand.
Geopolitical tensions, however, have kept a floor under prices. The ongoing conflict between Russia and Ukraine continues to disrupt energy markets, heightening uncertainty over Russian crude exports.
Russia’s Kirishi oil refinery, one of its largest, reportedly halted its main distillation unit, CDU-6, after a drone strike and subsequent fire on 4 October.
