Morning Highlights: Oil rises as traders shrug off glut fears; U.S. output climbs, Exxon eyes return to Iraq

Wednesday, October 8, 2025

Crude prices gained roughly 1% early Wednesday as markets looked past oversupply concerns and found support in OPEC+’s decision to restrain next month’s production increases. Traders also weighed U.S. inventory data showing mixed stock movements and signs of record domestic output.

Market snapshot (06:20 EST):

• Brent (Dec): $66.25 (+$0.80 | +1.1%)

• WTI (Nov): $62.54 (+$0.81 | +1.3%)

OPEC+ restraint and positioning lift sentiment

• The group’s modest 137 kbpd hike for November continues to steady markets after last week’s slide.

• “The market is in price limbo, with one side bent towards a possible supply glut and the other believing the ramp-up will not be as fast as anticipated,” said LSEG’s Emril Jamil.

• ANZ noted that investors are discounting the production bump until inventory data confirm a softer physical market.

• Long positions tied to tighter Russian crude flows helped underpin prices, though shipments remain near 16-month highs.

U.S. supply picture: record output, mixed inventories

• API data showed a 2.78 million-barrel crude build last week but a 1.15 million-barrel draw at Cushing, suggesting regional tightness.

• Gasoline and distillate stocks both declined.

• The EIA later today will clarify the trend as refiners ramp up maintenance season.

• Meanwhile, the agency lifted its U.S. output forecast again—now projecting a fresh annual record for 2025 as shale productivity remains strong.

• “The disconnect continues between paper pricing and the predicted glut in global balances,” said Oilytics’ Keshav Lohiya. “Flat price is firmly in the $65–$70 world.”

Macro lens: surplus looms despite stability

• Goldman Sachs reiterated its bearish call, flagging a 2 million bpd average surplus through 2026 and a Brent forecast of $56 for next year.

• The broader sentiment remains range-bound, with most traders viewing $70 as near-term resistance and mid-$60s as technical support.

Corporate: Exxon’s Iraq re-entry talks

• ExxonMobil is in advanced talks with Iraq’s Oil Ministry to re-enter the Majnoon field, which holds an estimated 38 billion barrels in reserves.

• A potential deal could include new export infrastructure and overseas storage capacity in Asia, the U.S., and Europe.

• The move follows renewed commitments from BP, TotalEnergies, and Shell—signaling a cautious return of Big Oil to Iraq amid efforts to rebuild production capacity.

Outlook

OPEC+’s restraint has bought the market temporary calm, but with record U.S. production and a heavy 2026 supply outlook, traders remain defensive. Price momentum may fade without a clear drawdown in inventories or a pickup in global demand indicators.