Brent steady as Chinese stockpiling hopes balance OPEC+ supply boost
The front-month ICE Brent contract has inched up by a marginal $0.03/bbl on the day, to trade at $66.69/bbl at 09.00 GMT.
IMAGE: Crude oil pump jacks in colour. Getty Images
Upward pressure:
Brent prices have found support from expectations that China will continue stockpiling oil and from concerns over possible new sanctions on Russia.
China’s stockpiling — which has helped absorb excess production this year — is likely to continue at a similar pace in 2026, according to Reuters citing a market watcher.
“Sentiment was also supported by data showing strong demand from China,” said Daniel Hynes, senior commodity strategist at ANZ Bank.
Speculation of additional sanctions on Russia also lent support to prices after the country’s largest airstrike on Ukraine set fire to a government building in Kyiv. US President Donald Trump told he was prepared to move to a second phase of restrictions, Reuters reported.
Further sanctions would reduce Russia’s oil exports to global markets, tightening supply.
“Reports that Russian oil flows could be further disrupted provided some support to oil prices,” Hynes added.
Attention is also on the US Federal Reserve, with its Federal Open Market Committee set to meet next week. Traders currently see an 89.4% chance of a quarter-point rate cut.
Lower interest rates reduce consumer borrowing costs and can stimulate economic growth, boosting oil demand.
Downward pressure:
Eight members of OPEC and its allies (OPEC+) have agreed to raise production by a combined 137,000 b/d in October, a move that has weighed on Brent futures.
“This marks the reversal of cuts that were set to remain in place until the end of 2026, following the rapid return of the previous tranche of idled barrels over recent months,” said ANZ Bank’s Hynes. “The …increase was viewed as a warning that the group is ready to push more barrels onto the market,” he added.
By Tuhin Roy
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