WTI remains sluggish near $68.00 as OPEC+ plans to raise output in December

• WTI oil prices are receiving downward pressure as OPEC+ is likely to increase production by 180,000 barrels per day in December.
• The US has purchased 6 million barrels of oil for the Strategic Petroleum Reserve, scheduled for delivery by May 2025.
• Israel declared a “limited” ground operation targeting Hezbollah positions in the southern Lebanese border area.

The price of West Texas Intermediate (WTI) oil is holding around $68.00 per barrel during the Asian session on Tuesday. Crude oil prices are subdued as expectations of increased supply and sluggish growth in global demand offset concerns about supply disruptions amid escalating conflict in the Middle East.

OPEC+, which includes the Organization of the Petroleum Exporting Countries and its allies such as Russia, is set to increase output by 180,000 barrels per day (bpd) in December. According to a report by the Financial Times, citing unnamed sources familiar with Saudi Arabia’s plans, the kingdom is determined to resume production from December 1, even if it leads to a temporary drop in prices.

Oil prices have faced downward pressure from weaker-than-expected demand growth this year, particularly in China, the world’s biggest crude importer. These demand concerns were heightened by data showing a decline in manufacturing activity in China for September. On Monday, the Caixin Manufacturing Purchasing Managers’ Index (PMI) fell to 49.3 in September, signaling a contraction, compared with 50.4 in August.

The United States (US) has purchased 6 million barrels of oil for the Strategic Petroleum Reserve (SPR) for delivery through May 2025. This purchase is part of a stockpile replenishment initiative following President Joe Biden’s 2022 directive to biggest sale ever. from the reserve, totaling 180 million barrels.

U.S. crude and fuel stockpiles were expected to have fallen by about 2.1 million barrels in the week ended Sept. 27, according to a preliminary Reuters poll published on Monday. The survey was conducted ahead of reports from the American Petroleum Institute (API) and the US Energy Information Administration (EIA), both of which are due to release data on changes in crude inventories for the same period on Tuesday.

Israel has announced a “limited” ground operation targeting Hezbollah positions in the southern border region with Lebanon, with troops moving into the area, according to local news agency Al Jazeera. In addition, Israeli warplanes launched extensive airstrikes in southern Beirut after civilians were instructed to evacuate. On Monday, Israeli attacks in Lebanon left at least 95 dead.