Oil prices recovered slightly in early Asian trading on Wednesday after two straight sessions of steep declines, as traders weighed the prospect of a larger OPEC+ output increase against signs of tighter U.S. crude inventories.
At the time of writing, Brent futures for December delivery had climbed to $66.17 while WTI was trading at $62.50, up 0.21% on the day.
The modest uptick comes after a sharp selloff earlier this week. On Monday, both Brent and WTI fell more than three percent, marking their steepest daily losses since August 1. The slide continued on Tuesday, when both benchmarks shed at least another one and a half percent. The back-to-back declines reflected mounting concerns that OPEC+ could move forward with a more aggressive production increase in November, potentially putting further pressure on prices at a time when demand recovery remains uncertain.
American Petroleum Institute data released late Tuesday offered a mixed picture that helped limit further losses. According to market sources, U.S. crude inventories dropped by 3.67 million barrels in the week ending September 26, suggesting tighter supply. However, gasoline stocks rose by 1.3 million barrels, while distillate inventories increased by 3 million barrels. The official government figures from the U.S. Energy Information Administration, due later on Wednesday, are expected to provide clearer confirmation of supply and demand trends in the U.S. market.
At the same time, OPEC+ discussions are increasingly in focus. Sources familiar with the group’s deliberations said members are considering a production hike of up to 500,000 barrels per day in November, triple the volume added in October. Saudi Arabia is reportedly pressing for a larger increase to bolster its market share. However, OPEC signaled unease with such reports, posting on X that claims of a 500,000 bpd increase were “misleading,” highlighting the uncertainty that still surrounds the group’s decision-making.
Traders today will be closely watching for the EIA’s inventory data, which could confirm the drawdown reported by the API and lend short-term support to prices. Any fresh signals from OPEC+ ahead of its next ministerial meeting will also be scrutinized for clarity on the scale of any upcoming supply changes. While geopolitical developments, including a potential government shutdown and U.S. efforts to broker a Gaza ceasefire, remain part of the broader backdrop, the near-term direction of oil prices will likely hinge on inventory trends and OPEC+ signals.
By Charles Kennedy for Oilprice.com
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