Oil slips as markets assess OPEC+ plans, demand concerns

By Seher Dareen LONDON (Reuters) -Oil prices fell on Wednesday, extending losses from the previous two sessions, as investors weighed OPEC+ plans for a larger output hike next month, while data from the U.S. and Asia showed signs of demand waning. Brent crude futures for December delivery were down 56 cents, or 0.9%, to $65.47 a barrel at 1316 GMT. U.S. West Texas Intermediate crude for November delivery was down 53 cents, also 0.9% lower, to $61.84 a barrel. Both were trading at their lowest since early September, after settling more than 3% lower on Monday and losing another 1.5% on Tuesday. Oil has dropped on market anticipation of a similar sized OPEC+ production increase in November to the 500,000 barrels per day hike in September, and on U.S. and Asian demand starting to fall, Rystad analyst Janiv Shah said. "U.S. drawdowns have slowed, so some bullish movement could start to flip," he added. The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, could agree to raise oil production by up to 500,000 bpd in November, triple the increase made for October, as Saudi Arabia seeks to reclaim market share, three sources familiar with the talks said. However, OPEC wrote on X that media reports of plans to raise output by 500,000 bpd were misleading. Meanwhile, in the United States, an industry report showed crude stockpiles fell while gasoline and distillate inventories rose in the week ended September 26, according to market sources citing American Petroleum Institute estimates on Tuesday. Data on factory activity in Asia, the world's biggest oil-consuming region, also added to concerns about fuel demand, as manufacturing activity contracted across most major economies in September. In addition, record U.S. oil production, some caution ahead of the OPEC+ meeting this weekend, and a risk-off environment due to the U.S. government shutdown also played a part, Giovanni Staunovo, an analyst at UBS said. The U.S. government shut down much of its operations on Wednesday as deep partisan divisions prevented Congress and the White House from reaching a funding deal – which government agencies have warned would halt the release of the closely watched September employment report, among other things. Weekly petroleum data from the U.S. Energy Information Administration will run as scheduled on Wednesday despite the federal government shutdown, the agency said. Focus was also shifting to the supply and export disruption in Russia due to Ukrainian assaults, PVM Oil Associates' analyst Tamas Varga said. The next round of talks between the U.S. and Russia aimed at improving relations could take place before the end of autumn, the state TASS news agency reported Russian Deputy Foreign Minister Sergei Ryabkov as saying. (Reporting by Seher Dareen in London, Mohi Narayan in New Delhi. Additional reporting by Ahmad Ghaddar in London. Editing by Alexandra Hudson, Aidan Lewis and Mark Potter)

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