Oil & Gas

Oil prices remained steady on Tuesday as markets reacted to a smaller-than-expected output hike by OPEC+, while concerns about weakening global demand and a potential supply glut kept gains in check. According to Zawya, Brent crude futures edged up by just 1 cent to $65.48 a barrel, while U.S. West Texas Intermediate (WTI) crude held firm at $61.69 a barrel. Both benchmarks had closed over 1% higher in the previous session.

Analysts noted that crude prices initially rose after OPEC+ announced a modest increase in production quotas. The oil cartel and its allies agreed to raise output by 137,000 barrels per day starting in November, far less than market expectations. ANZ analyst Daniel Hynes stated that the restrained increase eased fears of a larger-than-expected surplus, helping to support prices in the short term.

Despite the limited production hike, broader concerns about global demand are weighing on the market. Sluggish economic growth, exacerbated by trade tensions and rising interest rates, has raised fears of softer oil consumption in the months ahead. Analysts warn that rising supply from non-OPEC+ producers could further add to a potential oversupply situation if demand continues to falter.

Geopolitical risks are also influencing the market. Tensions between Russia and Ukraine continue to pose uncertainty, particularly after a drone attack forced Russia’s Kirishi refinery to halt operations at its CDU-6 distillation unit. The damage is expected to take about a month to repair. While such events provide short-term support for oil prices, they are being overshadowed by growing macroeconomic concerns and the risk of a prolonged supply-demand imbalance.