OPEC+ supply gush

ANS, WTI, Brent tumble on rumors of stepped-up OPEC+ production boost

Steve Sutherlin

Petroleum News

Alaska North Slope crude plummeted by more than 4% in a two-day rout that began with a $2.03 slide Monday Sept. 29 to close at $68.70 per barrel. West Texas Intermediate plunged $2.27 on the day to close at $63.45, and Brent dropped $1.78 to close at $67.97.

On Sept. 30 ANS fell 84 cents to close at $67.86, WTI dropped $1.08 to close at $62.37, and Brent fell 95 cents to close at $67.02.

The back-to-back declines reflected mounting worries over reports that the Organization of the Petroleum Exporting Countries and its allied producing nations were considering an aggressive extra production increase for November in a bid for market share.

OPEC+ has scheduled an increase of 137,000 barrels per day for October.

"The group is currently unwinding its voluntary supply cuts of 1.66 million bpd, which were planned to be brought back gradually at 137k bpd per month, ING analysts said in a note, according to a Sept. 30 Investing.com report. "There are now reports that it may go with three monthly supply hikes of around 500k bpd each; if true, this will increase the scale of the surplus through the fourth quarter of this year and next year."

On Sept. 30, traders also were watching as President Donald Trump advanced a peace deal to halt Israel's offensive against Hamas in Gaza.

Trump's 20-point plan proposed an end to fighting; the return of Israeli hostages; and an international "Board of Peace" to help run the territory, Yahoo Finance reported Sept. 30.

Hamas has not signed off on the deal, but Israeli Prime Minister Benjamin Netanyahu is on board.

A senior Hamas official told The Associated Press that some points in the proposal are unacceptable and must be amended, without elaborating but adding that the official response will only come after consultations with other Palestinian factions.

The crude price rout continued Oct. 1, as WTI fell 59 cents to close at $61.78, and Brent plunged $1.66 to close at $65.36. The Oct. 1 ANS closing price, which is estimated by the Alaska Dept. of Revenue, was not yet available as Petroleum News went to press early Oct. 2. WTI and Brent both were trading slightly higher in Asia Oct. 2.

Losses were softened Oct. 1 after OPEC wrote in a post on X that media reports of plans to raise output by 500,000 bpd were misleading, but -- bearishly -- U.S. crude inventories rose.

A U.S. government shutdown further pressured crude Oct. 1 after Congress failed to pass a funding bill.

U.S. commercial crude oil inventories for the week ended Sept. 26 jumped 1.8 million barrels from the previous week to 416.5 million barrels -- 4% below the five-year average for the time of year, according to U.S. Energy Information Administration data released Oct. 1.

Total motor gasoline inventories leapt 4.1 million barrels for the period, to 220.7 million barrels -- the same as the five-year average for this time of year, the EIA said. Distillate fuel inventories increased by 0.6 million barrels on the week to 123.6 million barrels -- 6% below the five-year average for the season.

The crude price rout ended a three-day streak of above-$70 closing prices for ANS.

ANS gained 27 cents on Sept. 26 to close at $70.73, as WTI jumped 74 cents to close at $65.72, and Brent added 33 cents to close at $69.75.

On Sept. 25, ANS gained 34 cents to close at $70.46, WTI fell a penny to close at $64.98, and Brent added 11 cents to close at $69.42.

ANS jumped $1.22 Sept. 24 to close at $70.12, while WTI leapt $1.58 to close at $64.99, and Brent leapt $1.68 to close at $69.31.

ANS gained $1.04 over the trading week from its close of $68.90 Sept 23, to its close of $67.86 Sept. 30.

On Sept. 30, ANS closed at a $5.49 premium over WTI and at an 84-cent premium over Brent.

Investment banks maintain price forecasts

Brent is expected to average $63.56 a barrel in fourth quarter 2025, while WTI is seen at $60.36 a barrel, a Wall Street Journal bank survey showed.

"For Brent it is a tug of war between these two forces, which are so far offsetting each other out: Geopolitics and OPEC+ unwinding," said Claudio Galimberti, Rystad energy chief economist.

Goldman Sachs analysts said OPEC+ could okay a larger monthly increase for November on signs of solid demand in Asia and OECD inventories slightly below 2024 levels.

But OPEC+ spare production is quickly eroding, according to DNB Carnegie.

"We expect that only 50% of the 1.65-million-barrel quota increase will translate into additional barrels in the market due to a combination of limited production capacity and current overproduction among the OPEC+ members," its analysts said.

The Journal said restored crude flows from Iraq's northern Kurdistan region to Turkey exacerbated oversupply concerns from fourth quarter through 2026, while President Trump's peace plan for Gaza may reduce oil's risk premium.

"Volatility in the region is unlikely to subside in the immediate term," said Jorge Leon, Rystad Energy head of geopolitical analysis. "The geopolitical risk premium remains firmly embedded in oil markets, with upside price risks persisting as traders brace for possible setbacks or renewed escalation."

Brent and WTI are forecast to fall to $61.77 and $58.74, respectively, in first quarter 2026. The banks see upside later, with prices averaging $63.07 and $61.83, respectively, in the fourth quarter.