Oil prices rose on Wednesday as investors brushed off oversupply fears, having digested a decision earlier by OPEC+ to restrain production increases next month.
Brent crude futures rose 48 cents, or 0.7%, to $65.93 a barrel by 0400 GMT. U.S. West Texas Intermediate crude climbed 51 cents, or 0.8%, to $62.24.
The benchmarks settled broadly flat in the previous session as investors weighed signs of a supply glut against a smaller-than-expected increase to November output from the Organization of the Petroleum Exporting Countries and affiliates.
“The market is in price limbo, with one side bent towards a possible supply glut and the other believing the ramp-up will not be as fast as anticipated,” said Emril Jamil, a senior analyst at LSEG Oil Research.
Prices are trading higher for now as some traders are holding long positions, or bets that prices will rise, on continued efforts to curb Russian crude flows, Jamil added.
OPEC+ had opted for a rise of 137,000 barrels a day, the lowest amount among options the group discussed at the weekend.
“Until the physical market shows signs of softening via rising inventories, investors are likely to discount the impact of the production increases,” ANZ analysts said on Wednesday.
Price gains are however capped as fears of Russian supply disruption eased, with crude oil shipments holding close to a 16-month high over the past four weeks, the ANZ analysts said.
Investors are also awaiting U.S. inventory data from the Energy Information Administration later on Wednesday.
On Tuesday, sources American Petroleum Institute figures said U.S. crude stocks rose by 2.78 million barrels in the week ended October 3.
Conversely, gasoline and distillate inventories fell, the sources said, citing the API data.
Meanwhile, U.S. oil production is likely to set a larger record this year than previously expected, the EIA said on Tuesday.
