Oct 01, V7N - Oil prices remained relatively stable on Tuesday as the potential for increased supply and sluggish global demand growth outweighed concerns about escalating tensions in the Middle East, which could affect output from key exporting regions. Brent crude futures for December delivery rose slightly by 7 cents, or 0.1%, to $71.77 a barrel, while U.S. West Texas Intermediate (WTI) crude futures for November delivery increased by 8 cents, or 0.12%, to $68.25.

In September, Brent futures experienced a 9% decline, marking their third consecutive monthly drop and the largest since November 2022. Over the third quarter, Brent fell by 17%, its biggest quarterly loss in a year. Similarly, WTI saw a 7% decrease last month and a 16% drop for the quarter.

Market strategist Yeap Jun Rong from IG noted that oil prices are under pressure due to anticipated supply additions from OPEC+ by the end of the year, coupled with a weak demand outlook from China, as reflected in the country's latest PMI numbers. Despite weaker data, there is some stabilization in sentiment, driven by hopes that recent stimulus measures might boost the economy.

China's manufacturing activity contracted significantly in September, with new orders declining both domestically and internationally, leading to a drop in factory owners' confidence. Analysts suggest that recent stimulus measures could help China's growth rebound to about 5% in 2024, although they are unlikely to alter the long-term outlook significantly.

OPEC+, which includes OPEC members and allies like Russia, plans to increase output by 180,000 barrels per day in December. Meanwhile, geopolitical tensions in the Middle East remain a concern, but the market seems to be pricing in the risks of a broader regional conflict. Israel's military actions against Hezbollah targets in Lebanon have heightened tensions, following the killing of Hezbollah leader Hassan Nasrallah.

In the U.S., crude oil and fuel stockpiles were expected to have decreased by about 2.1 million barrels in the week ending September 27, according to a preliminary Reuters poll. This data was anticipated ahead of a report from the American Petroleum Institute.

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