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The US government shutdown and OPEC+ production increase are the main topics of discussion.

After two days of drops, oil prices stabilized on Wednesday as investors weighed OPEC+'s plans to increase output next month. They also considered the impact of a U.S. shutdown of government that could affect economic activity and fuel consumption.

Brent crude futures, for delivery in December, rose by 28 cents at 0500 GMT to $66.31 per barrel. U.S. West Texas Intermediate Crude rose by 26 cents a barrel to $62.63.

Brent and WTI settled both more than 3% lower on Monday, marking their biggest daily declines since 1 August. They both fell further by 1.5% on Tuesday.

The market is concerned about a possible supply overhang as OPEC slowly revives production.

Three sources familiar with the discussions said that the Organization of the Petroleum Exporting Countries (OPEC+) and its allies could agree to increase oil production in November by as much as 500,000 barrels daily (bpd), triple the October increase, as Saudi Arabia tries to regain market share.

Two sources claim that eight members of this group, who pump about half of the oil in the world, are considering an increase of 274,000 bpd to 411,000, according to the two sources. According to a third source, the increase could be as high as 500,000 bpd.

OPEC posted on X that reports in the media about plans to increase output by 500,000 bpd are misleading.

An industry report that showed U.S. crude stocks fell, while gasoline and distillate inventory rose in the last week added to pressure on prices.

According to Tuesday's estimates by the American Petroleum Institute, market sources cited by American Petroleum Institute have estimated that crude stocks dropped 3.67 million barrels during the week ending September 26.

Sources said that gasoline inventories rose 1.3 million barrels, while distillate stocks increased 3 million barrels compared to last week.

Sachdeva, SS WealthStreet, said that while U.S. crude stocks have been declining, the rate of decline has slowed down, tempering bullishness.

Deep partisan differences prevented Congress and White House from reaching an agreement on funding.

The 15th shutdown of the federal government since 1981, agencies warned, would stop the release of the closely-watched September employment report. It would also slow down air travel, halt scientific research, deny pay to U.S. soldiers, and result in the furloughing of 750,000 federal employees at a cost of $400,000,000 per day.

Concerns about fuel demand were also heightened by data on the factory activity in Asia - the world's largest oil-consuming region.

Surveys showed that manufacturing activity declined in most major economies during September. This was due to a combination of factors, including weak Chinese demand, soft U.S. economic growth, and the looming U.S. Tariffs. Reporting by Mohi Nairayan from New Delhi; additional reporting by Laila Kearney. Editing by Lincoln Feast, Christian Schmollinger and Christian Schmollinger.

(source: Reuters)