DTN Oil Update
Oil Prices Rise on Smaller Than Expected OPEC+ Output Hike
VIENNA (DTN) -- Oil prices edged higher in a choppy morning session Monday, Oct. 6, after OPEC+ agreed to a smaller-than-expected production quota increase for November. Emerging signs of a growing oil glut kept gains in check.
NYMEX-traded WTI crude for November delivery rose $0.60 to $61.48 bbl, and ICE Brent for December delivery gained $0.66 to $65.19 bbl.
Among oil products, November RBOB gasoline futures gained $0.0189 to $1.8794 gallon, and front-month ULSD futures inched up $0.0078 to $2.2441 gallon.
The U.S. Dollar Index strengthened by 0.585 points to 98.000 against a basket of foreign currencies.
Oil futures plunged around 8% last week on rumors that OPEC+ was considering picking up the pace of production hikes. The 137,000-bpd monthly increase agreed upon at a meeting Sunday, Oct. 5, was identical to the hike for October, lending support to oil futures given these volumes representing the lower bound of the already priced in hike.
The prospect of additional barrels hitting a market already looking to be oversupplied, however small the increase may be, did little to alleviate concerns about an increasingly lop-sided supply-demand balance. Bloomberg on Monday reported that volumes of oil at sea in transit jumped to a nine-year high 1.2 billion bbl last month, citing tanker tracker data from Vortexa. Including oil in floating storage, total volumes on water were still the highest since 2020, when a pandemic induced demand plunge led to rapidly swelling storage on- and off-shore.
The U.S. Energy Information Administration's newest short-term energy outlook is scheduled for Tuesday release. In last month's edition, EIA raised the forecasted OECD inventory growth rate to 6% in 2025-2026 and adjusted the 2024-2025 growth rate from 5% to 6.1%, expecting global inventory builds to average more than 2 million bpd from the third quarter of 2025 through the first quarter of 2026. The estimate, however, did not take into account OPEC+'s 137,000 bpd output hike plan for October.
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