Search for Balance in the Oil Market: What Will Prices Be?

Equilibrium Process in Oil Prices

Oil prices are attempting to stabilize after falling over the past two days. Brent crude is trading around 66 dollars per barrel, having fallen 5% at the beginning of the week. Meanwhile, US crude oil prices are trading below 63 dollars. This weekend, OPEC members may discuss increasing production by 500,000 barrels each month to boost market share; however, OPEC has stated it has no such plan.

Threat of US Government Shutdown

Investors are closely monitoring the uncertainty caused by the US Congress's inability to extend the budget deadline. The government shutdown, set to begin at midnight Washington time, has increased its impact on markets. This is evident in slight declines in US stock futures and Asian stock markets.

Importance of OPEC+ Supply Increase

In September, crude oil recorded its second consecutive monthly decline. Previous OPEC+ supply increases are strengthening expectations that global production will exceed demand. However, it is observed that China, the world's largest oil importer, has supported prices in recent quarters by stockpiling. Nevertheless, the International Energy Agency expects a record supply surplus for next year.