Oil rebounds from 16-week lows on prospects of tighter Russian crude sanctions

On the supply side, OPEC+ could agree to raise oil production by up to 500,000 bpd in November, triple the increase made for October, as Saudi Arabia seeks to reclaim market share

Oil prices rose on Thursday, snapping a three-day losing streak and rebounding from 16-week lows on prospects of tighter sanctions on Russian crude, though expectations of higher supply from an OPEC+ output boost next month capped gains.

Brent crude futures gained 15 cents, or 0.2%, to $65.50 a barrel by 0116 GMT. U.S. West Texas Intermediate crude climbed by 14 cents, or 0.2%, to $61.92 a barrel.

On Wednesday, Brent and WTI both lost about 1%, with Brent closing at its lowest since June 5 and for WTI since May 30.

"Buying interest emerged as WTI neared its $60 support level, while heightened geopolitical risks and speculation about tighter sanctions on Russian crude also lent support," said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities.

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 and those that are facilitating circumvention.

Also, the U.S. will provide Ukraine with intelligence for long-range missile strikes on Russian energy infrastructure, the Wall Street Journal reported on Wednesday.

This will make it easier for Ukraine to hit refineries, pipelines and other infrastructure with the aim of depriving the Kremlin of revenue and oil, the WSJ said.

Still, a U.S. government shutdown stoked worries about the global economy, while expectations of higher output by OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, weighed on sentiment, limiting the price gains, Nissan's Kikukawa said.

U.S. President Donald Trump's administration on Wednesday froze $26 billion for Democratic-leaning states, following through on a threat to use the government shutdown to target Democratic priorities.

On the supply side, OPEC+ could agree to raise oil production by up to 500,000 bpd in November, triple the increase made for October, as Saudi Arabia seeks to reclaim market share, three sources familiar with the talks said.

That would come even as U.S. and Asian demand starts to decline.

The Energy Information Administration said on Wednesday that U.S. crude oil, gasoline and distillate inventories rose last week as refining activity and demand softened.

Crude inventories rose by 1.8 million barrels to 416.5 million barrels in the week ended on September 26, compared with expectations in a Reuters poll for a 1 million-barrel rise.