Oil prices declined in Asian trading on Tuesday, as concerns over excess supply outweighed uncertainty about the impact of U.S. sanctions on Russian oil giants Rosneft and Lukoil, despite optimism over progress toward reopening the U.S. government.
اضافة اعلان
Brent crude futures fell by 27 cents, or 0.4%, to $63.79 per barrel by 07:17 GMT, while U.S. West Texas Intermediate (WTI) fell 27 cents, or 0.5%, to $59.86 per barrel. Both benchmarks had gained about 40 cents in the previous session.
The longest government shutdown in U.S. history is expected to end this week after the Senate approved a deal to fund the federal government, which will now go to the House of Representatives. House Speaker Mike Johnson expressed hope to pass it by Wednesday.
While progress toward reopening the government has supported markets generally, concerns about crude oversupply continue to weigh on oil prices.
In a note, energy consultancy Ritterbusch & Associates said:
"With OPEC production continuing to rise, global oil balances are tilting increasingly negative on the supply side, while demand continues to slow amid sluggish economic growth in major oil-consuming countries."
Earlier this month, the OPEC+ alliance approved a 137,000 barrels per day production increase for December, maintaining the same level as in October and November, and agreed not to raise output further in the first quarter of next year.
Although the supply glut from rising OPEC output has prompted investors to adopt more pessimistic positions in recent weeks, U.S. sanctions remain a focal point. Analysts at ANZ noted that President Donald Trump’s recent measures targeting Rosneft and Lukoil add further market uncertainty.
Reuters reported Monday that Lukoil declared force majeure at one oil field in Iraq, while Bulgaria is preparing to seize Lukoil’s Burgas refinery, marking the most direct impact yet from last month’s sanctions.
Oil inventories on ships in Asian waters have also doubled in recent weeks, as strict Western sanctions reduced exports to China and India, while import quota restrictions limited demand from independent Chinese refineries. Some refineries in China and India have turned to buying oil from the Middle East and other regions.
Ritterbusch concluded:
"One potential challenge to the current bearish outlook for oil is whether China will continue to channel Russian supplies into its strategic reserves, and whether India will respond to Trump’s pressures by delaying further purchases from Russia."
(Reuters)
