Oil prices bounce from four-month lows; more Russian sanctions coming?

Investing.com-- Oil prices edged higher Thursday, stabilizing after tumbling to near four-month lows in the previous session, on speculation of tighter sanctions on Russian crude, potentially tightening global supply.

At 04:45 ET (08:45 GMT), Brent Oil Futures expiring in December rose 0.2% to $65.47 per barrel and West Texas Intermediate (WTI) crude futures gained 0.2% to $61.90 per barrel.

Both benchmarks slid to near four-month lows on Wednesday, having lost nearly 7% so far this week, hurt by supply glut worries sparked by OPEC+ supply increases and broader concerns about economic growth.

More Russian sanctions?

The crude market has edged higher after the Group of Seven nations’ finance ministers said on Wednesday they will take steps to increase pressure on Russia by targeting those who are continuing to increase their purchases of Russian oil.

Also, the Wall Street Journal reported that the U.S. is set to provide Ukraine with intelligence for long-range missile strikes on Russian energy infrastructure.This will make it easier for Ukraine to hit refineries, pipelines and other infrastructure, with the aim of depriving the Kremlin of revenue by limiting the amount of crude Moscow can supply to the global market.

U.S. crude stocks rise more than expected - EIA

Data from the U.S. Energy Information Administration (EIA) on Wednesday showed U.S. crude stocks rose by 1.8 million barrels in the week to Sept. 26, the first increase in three weeks. 

Analysts had expected a rise of 1.5 million barrels, but the higher-than-expected build was seen as evidence of weaker refining activity and softer demand, weighing on prices after a sharp sell-off.

The data also showed gasoline inventories increased by 300,000 barrels to 228.7 million, while distillate stocks climbed 600,000 barrels to 120.9 million. 

OPEC+ meeting looms with potential hike plan

The report comes as markets grappled with oversupply concerns following reports that OPEC+ could raise production again in November. 

The group has already agreed to a modest increase of about 137,000 barrels per day for October, but reports stated that members may discuss a larger hike up to 500,000 barrels at their meeting on Oct. 5. 

U.S. shutdown risks add pressure

The U.S. government shutdown, which began on Wednesday after Congress failed to pass a funding bill, has added another layer of pressure on crude markets.

The closure could delay the release of key economic data such as the U.S. nonfarm payrolls report and inflation readings, depriving energy traders of signals on demand and monetary policy.

More broadly, the political standoff has unsettled financial markets, reducing risk appetite and weighing on commodities tied to global growth.

Ayushman Ojha contributed to this article