Oil Steady Despite OPEC+ Plans to Hold Production Hike

Oil prices were little changed despite news that OPEC+ plans to end its supply increases, with the market weighed down by fears of an oil supply glut and weak factory data in Asia.

Brent crude futures were down 1 cent, or 0.02%, at US$64.76 a barrel by 0959 GMT. U.S. West Texas Intermediate crude was down 3 cents, or 0.05%, at US$60.95.

The Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, agreed on Sunday to raise output by a small 137,000 barrels per day (bpd) in December and to pause increases in the first quarter of next year.

Brent and WTI both fell more than 2% in October, down for a third straight month and hitting a five-month low on October 20.

ING's Head of Commodities Research, Warren Patterson, said the OPEC+ decision appears to be acknowledgment of the large surplus that the market faces, particularly early next year.

"Obviously, (there is) still plenty of uncertainty over the scale of the surplus, which will be dependent on how disruptive U.S. sanctions will be to Russian oil flows," he added.

RBC Capital's Head of Commodities Strategy, Helima Croft, noted that Russia remains a key supply wild card after U.S. sanctions on Russian producers Rosneft and Lukoil as well as attacks on the country's energy infrastructure resulting from the war in Ukraine.

A Ukrainian drone attack struck Tuapse on Sunday, one of Russia's main Black Sea oil ports, causing a fire and damaging at least one ship.

Analysts are keeping their oil price forecasts largely unchanged as rising OPEC+ output and lacklustre demand offset geopolitical risks to supply, a Reuters poll showed. Estimates of oil market surplus ranged from 190,000 to 3 million bpd.

The Energy Information Administration reported on Friday that U.S. crude oil output rose to a record 13.8 million bpd in August.

Headwinds for Asia's big manufacturing hubs persisted in October, business surveys showed on Monday. Asia is the world's biggest oil-consuming region.