Oil prices climbed Wednesday as OPEC+ upheld a cautious production stance, efforts to curb Russian crude flows and expectations of potential US Federal Reserve (Fed) rate cuts also lent support, while US data signaling weaker demand capped further gains.
Brent crude was trading at $65.88 per barrel at 10.06 a.m. local time (0706 GMT), up 0.5% from the previous close of $65.55.
US benchmark West Texas Intermediate (WTI) increased by 0.5% to $62.03 from $61.74 in the prior session.
Prices continued to gain support from the cautious production policy adopted by members of the OPEC+ group during their Oct. 5 online meeting. Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman confirmed plans to raise production by 137,000 barrels per day in November, in line with expectations.
The decision was seen as a measured step to maintain market stability while gradually reclaiming market share. It also helped ease lingering oversupply concerns, lending additional support to prices.
Analysts said ongoing efforts to curb Russian oil flows prompted some investors to take positions on expectations of higher prices, further underpinning the market.
Meanwhile, signs of weakness in the US labor market reinforced dovish expectations for the Fed, helping to sustain risk appetite in global markets.
Analysts said last week's private-sector employment figures strengthened the case for potential rate cuts, but noted that the lack of upcoming inflation data could add uncertainty to the Fed's policy trajectory.
Lower rates are expected to boost growth and lift demand in oil-reliant sectors, supporting prices, analysts said.
However, on the demand side, data pointing to rising US crude inventories signaled a potential slowdown.
The American Petroleum Institute (API) estimated that US commercial crude stocks rose by 2.78 million barrels last week compared to the previous week, indicating weak demand and putting downward pressure on prices.
The US Energy Information Administration (EIA) is scheduled to release official inventory data later in the day.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr
