Global Oil Market Experiences Shock From OPEC Oversupply Plan

The global oil market is experiencing shock from an anticipated supply hike by the Organisation of Petroleum Exporting Countries (OPEC), as oil prices edged lower on Thursday, extending a run of declines into a fourth day, with Brent hitting its lowest since early June due to concerns about oversupply in the market.

The OPEC+ could agree to raise oil production by up to 500,000 barrels per day in November, triple the increase made for October, as Saudi Arabia seeks to reclaim market share, three sources familiar with the talks said.

Jorge Montepeque, Managing Director at Onyx Capital Group, said some banks, such as Macquarie, have made predictions of a super glut in oil markets, which have weighed on sentiment.

The Group of Seven nations’ finance ministers said on Wednesday they will increase pressure on Russia by targeting those continuing to boost purchases of Russian oil.

The U.S. will provide Ukraine with intelligence for long-range missile strikes on Russian energy infrastructure, two officials told Reuters on Wednesday, confirming an earlier Wall Street Journal report.

The WSJ said this will make it easier for Ukraine to hit refineries, pipelines, and other infrastructure, thus depriving the Kremlin of revenue and oil.

“There is some concern in the market again that Russian oil could get disrupted,” said Giovanni Staunovo, commodity analyst at UBS. But as long as there are no disruptions, the impact on prices will likely be minor, he said.