Oil prices bounced back on Thursday after hitting 16-week lows, supported by expectations of tighter sanctions on Russian crude. However, the potential for increased supply from OPEC+ output in November limited the extent of the recovery.
Brent crude futures rose 15 cents, or 0.2%, to $65.50 a barrel by 0116 GMT, while U.S. West Texas Intermediate (WTI) crude gained 14 cents, or 0.2%, to $61.92. The rebound comes after both benchmarks lost nearly 1% on Wednesday, with Brent closing at its lowest since June 5 and WTI since May 30.
“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 at Nissan Securities Investment.
The Group of Seven (G7) finance ministers announced plans on Wednesday to increase pressure on Russia by targeting countries and entities expanding purchases of Russian oil or helping to circumvent sanctions. Adding to the geopolitical tension, the Wall Street Journal reported that the U.S. will provide Ukraine with intelligence for long-range missile strikes on Russian energy infrastructure, a move that could disrupt refineries, pipelines, and other facilities key to Moscow’s oil revenues.
Despite these supportive factors, market sentiment was tempered by concerns over a U.S. government shutdown and the prospect of higher production from OPEC+. According to three sources familiar with discussions, the group may agree to raise output by up to 500,000 barrels per day (bpd) in November—three times the increase made for October—as Saudi Arabia seeks to reclaim market share.
Meanwhile, U.S. stockpile data pointed to weakening demand. The Energy Information Administration (EIA) reported that U.S. crude oil, gasoline, and distillate inventories all rose last week. Crude inventories climbed by 1.8 million barrels to 416.5 million, surpassing expectations of a 1 million-barrel increase.
With OPEC+ supply potentially rising, U.S. demand softening, and ongoing geopolitical risks, traders remain cautious. Analysts note that oil markets may face further volatility in the coming weeks as the interplay of sanctions, supply adjustments, and global economic uncertainty unfolds.