Oil prices rose early on Wednesday after an industry report showed on Tuesday that the crude stocks at the key Cushing hub fell further and OPEC+ somewhat eased fears of an imminent glut with a planned modest increase in output.
As of 8:05 a.m. EDT on Wednesday, WTI Crude prices were up by 1.44% at $62.62, while the front-month Brent Crude futures traded 1.42% higher at $66.38.
Cushing, Oklahoma, is the physical delivery spot for oil bought and sold in West Texas Intermediate futures contracts.
The American Petroleum Institute (API) estimated on Tuesday that stocks at the WTI delivery hub, Cushing, fell by 1.2 million barrels in the week ending October 3.
EIA data for week ending September 26 showed Cushing inventories at 23.467 million barrels—a figure that is unusually low. Levels this thin leave the market more vulnerable to regional supply disruptions and amplify price swings when pipeline flows shift.
“The disconnect continues between paper pricing and the predicted glut in global balances,” Keshav Lohiya, founder of consultant Oilytics, told Bloomberg.
“We are back to an oil trading world where flat price is firmly in the $65 to $70 world.”
The modest monthly production increases from the OPEC+ alliance have also eased some of the oversupply fears, especially as estimates suggest that the group will not be returning all the barrels indicated in the headline figures of the deal. Some producers are compensating for previous overproduction, while many others simply lack the production capacity to raise output much further.
The price move higher is also supported by short-covering after last week’s sell-off, even as rising OPEC+ output and a fresh EIA upgrade to U.S. production stoke fears of a growing glut into 2026, Saxo Bank analysts said on Wednesday.
“Until the physical market shows signs of softening via rising inventories, investors are likely to discount the impact of the production increases,” analysts at ANZ commented on Wednesday.
By Tsvetana Paraskova for Oilprice.com
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