Oil fell to the lowest in nearly five months as OPEC+ is expected to agree on restoring more idled supply in a meeting over the weekend, while the ongoing US government shutdown fueled risk-off sentiment.
West Texas Intermediate slid more than 2% to settle at $60.48 a barrel, its lowest close since early May. Brent traded lower to settle near $64, the lowest since late May. Early signs of global oversupply may be emerging in the Middle East, while US crude and gasoline stockpiles swelled last week.
In Washington, political uncertainty added another layer of concern as White House press secretary Karoline Leavitt warned that layoffs tied to the federal government shutdown are likely to number in the thousands. The news added to worries about the health of the US economy and in turn, oil consumption.
This week’s price slump was also partly stoked by the possibility that Organization of the Petroleum Exporting Countries and its partners could consider fast-tracking their latest round of production hikes when they meet on Sunday. A Bloomberg survey predicted OPEC’s crude production rose last month. Some investment banks are already predicting Brent will drop to the $50s-a-barrel range next year.
Prices have found some support from the fact that China has been purchasing large amounts of oil for its strategic reserve, easing the buildup of inventories in the West. Those purchases may slow next year, according to Rystad Energy.
“The focus for oil this week is squarely on the OPEC+ meeting over the weekend. We expect they will agree to continue adding barrels back to the market even amid forecasts for high inventory builds in 2026,” said Edward Bell, acting group head of research and chief economist at Emirates NBD.
Turkey’s Ceyhan oil export terminal is scheduled to load its first cargo from Iraq’s Kurdish region since 2023 after a deal was reached last month to allow flows to resume, adding even more supply to the market.
Meanwhile, French President Emmanuel Macron said that detaining oil tankers can help put a stop to the shadow fleet that helps Russia skirt sanctions and export barrels around the world.
But Russian President Vladimir Putin warned oil prices “will skyrocket” and immediately exceed $100/bbl without Russian crude supplies to the global market.
Oil Prices
WTI for November delivery fell 2.1% to settle at $60.48 a barrel
Brent for December settlement edged 1.9% lower to settle at $64.11
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