(Investing)– Oil prices rose Thursday, rebounding after logging sharp losses in recent sessions as expectations of a supply glut and softening demand presented a weak outlook for crude.
At 04:45 ET (09:45 GMT), for January rose 0.7% to $63.98 a barrel and gained 0.9% to $60.15 a barrel.
Both contracts slid some 1% each on Wednesday, having fallen a third straight month in October.
Trump administration to start cutting flights
Crude prices have bounced Thursday as traders saw some value after sharp losses on Wednesday as data showed an unexpected build in U.S. .
Expectations of more disruptions in U.S. fuel demand also weighed on crude.
The U.S. Department of Transportation plans to begin cutting flights from Friday, by up to 10% at 40 high-volume airports amid safety concerns stemming from a lack of air traffic controllers, transportation secretary Sean Duffy said on Wednesday.
The planned cuts come as a U.S. government shutdown entered its 36th consecutive day, disrupting government services in wide swathes of the country. About 13,000 air traffic controllers and 50,000 transportation security agents have been working without pay due to the shutdown.
Tens of thousands of flights were delayed since the shutdown began, while shortages in TSA staffers also caused overcrowding at major airports.
A cut in flight numbers points to weaker fuel demand in the world’s largest economy.
Oil oversupply fears persist
Oil has remained on the backfoot as markets fretted over a potential supply glut in 2026, especially after several production hikes by the Organization of Petroleum Exporting Countries and allies (OPEC+) this year.
The OPEC+ over the weekend said it will hike production by 137,000 barrels per day in December, and that it will pause its production hikes in the first quarter of 2026.
The announcement offered little relief to oil markets, given that the OPEC+ hiked production by nearly 3 million barrels a day so far in 2025. This, coupled with strong U.S. production and exports, was a major driver of market anxiety over a supply glut.
Russia disruptions provide support
That said, “while the outlook for the oil market remains bearish with expectations for a large surplus in 2026, there are clear and obvious risks in the form of potential disruptions to Russian oil flows,” said analysts at ING, in a note.
Ukraine struck Russia with at least 75 drones earlier Thursday, sparking a fire in an industrial area of the southern city of Volgograd, halting dozens of flights across the country, Russian officials said.
Ukraine has for several months been striking Russian oil refineries, depots and pipelines in a bid to undermine the Russian economy.
Ambar Warrick contributed to this article
