Oil Climbs In Risk-On Mood As Traders Weigh Crude Supply Outlook

Oil crept higher for a second day as optimism over interest rate cuts in the US and low global stockpiles help support prices. 

Brent climbed toward $67 a barrel, rising along with global stocks on mounting expectation the Federal Reserve will lower borrowing costs. A measured production boost by OPEC+ for October also eased the impact of Saudi Arabia’s decision to trim pricing for most of its grades.

At the Asia Pacific Petroleum Conference in Singapore, Trafigura Group’s Chief Economist Saad Rahim said low inventories in pricing centers such as Europe, along with stockpiling from China, have contributed to the resilience in oil prices recently. Tight product markets also provided support, he added.

Crude has fallen about 10% this year on concerns a supply glut will form in the coming months as the Organization of the Petroleum Exporting Countries and its partners bring back idled production faster than initially planned. So far, the group has managed to pursue a strategy to reclaim market share without a major collapse in prices, which have been stuck in a tight range since early August. 

OPEC+ “has announced a huge amount of increases over the past few months, but a lot of those barrels have yet to really make themselves felt in the physical market,” Rahim said during a panel session on Tuesday.

OPEC+ decided to return 137,000 barrels a day in October, a smaller increment than scheduled for previous months, highlighting some caution in the outlook. Still, it signals a push by the group to reclaim market share over defending prices.

Saudi Aramco, meanwhile, will trim the price for all its crude for buyers in Asia next month, potentially sending a bearish signal, according to traders dealing oil in the region. The market is facing an oversupply toward the end of the year and into 2026, which will likely put downward pressure on prices.   

“Despite the policy shift, oil prices have held firm,” said Ole Hvalbye, a commodity analyst at SEB AB, adding that prices are “supported by low U.S. and OECD inventories, where crude and product stocks remain well below seasonal norms”

• Brent for November settlement was 1% higher at $66.66 a barrel as 10:22 a.m. in London.

• WTI for October delivery rose 1% to $62.91 a barrel.