Oil Rises on Russia Sanctions Fears; Oversupply Caps Gains

TOKYO/SINGAPORE – Oil prices rose on Thursday following three straight sessions of losses, as the potential for tighter sanctions on Russian crude lent support, though oversupply concerns limited gains.
Brent crude futures gained 20 cents, or 0.31%, to $65.55 a barrel at 0631 GMT, while U.S. West Texas Intermediate (WTI) climbed 20 cents, or 0.32%, to $61.98 a barrel.
“Buying interest emerged as WTI neared its $60 support level, while heightened geopolitical risks and speculation about tighter sanctions on Russian crude also lent support,” said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment.
The Group of Seven (G7) finance ministers said on Wednesday they would increase pressure on Russia by targeting those continuing to purchase Russian oil and those facilitating circumvention. Additionally, the U.S. will provide Ukraine with intelligence for long-range missile strikes on Russian energy infrastructure, helping Ukraine target refineries, pipelines, and other facilities, according to the Wall Street Journal.
Stockpiling demand from China, the world’s largest crude importer, also supported oil prices. However, a U.S. government shutdown raised concerns about the global economy, and expectations of higher output from OPEC+, the Organization of the Petroleum Exporting Countries and allied producers, capped price gains.
OPEC+ may agree to raise production by up to 500,000 barrels per day in November, triple the October increase, as Saudi Arabia seeks to reclaim market share, sources said.
U.S. crude, gasoline, and distillate inventories rose last week, with crude stocks increasing by 1.8 million barrels to 416.5 million barrels for the week ending September 26, according to the Energy Information Administration, exceeding expectations amid softer refining activity and demand. __Reuters