Oil Prices Dip to 17-Week Low Amid U.S. Government Shutdown and OPEC Output Concerns
Global oil prices slipped to their lowest levels in 17 weeks as traders reacted to a combination of political and market pressures. Brent crude futures dropped by 72 cents, or 1.1%, to settle at $65.31 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 68 cents, also down 1.1%, to $61.69. Both benchmarks are now on track for their weakest settlements since mid-2024. Analysts warn that reduced demand in the U.S. and Asia, coupled with uncertainty around government spending in Washington, could deepen the downward trend.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, are weighing whether to raise output again in November. Traders expect a production hike similar to September’s 500,000 barrels per day (bpd) increase, while some insiders suggest a steeper boost may be on the table as Saudi Arabia pushes to defend its market share. However, OPEC officials disputed media reports suggesting a large-scale supply surge, calling them “misleading.” Still, even speculation of additional barrels hitting the market has pressured prices further.
Adding to market jitters, U.S. crude inventories rose more than expected last week. Data from the U.S. Energy Information Administration (EIA) showed a 1.8-million-barrel build, nearly double analysts’ forecasts. Analysts believe this sharp rise was largely due to weaker exports, signaling softer demand. “We’ve already had a significant sell-off linked to the government shutdown, and this stock build only reinforced concerns about slowing consumption,” said Phil Flynn, senior analyst at Price Futures Group.
The U.S. government shutdown, triggered by a budget standoff between Congress and the White House, has heightened fears of economic slowdown. The closure has already disrupted critical data releases such as the monthly jobs report, while private payrolls unexpectedly fell in September—raising fresh questions about labor market strength. In Asia, meanwhile, manufacturing output contracted across several economies, dampening fuel demand prospects in the world’s largest oil-consuming region.
Beyond the U.S. and OPEC, supply risks remain elevated in Russia. Recent Ukrainian strikes have strained Moscow’s domestic fuel supplies, with some regions reporting shortages despite government assurances of stability. Meanwhile, a fire at a major oil refinery northeast of Moscow raised additional concerns, though officials dismissed any link to drone attacks. Analysts say geopolitical tensions, coupled with fragile global demand, will continue to weigh heavily on oil markets in the weeks ahead.
source: The nation