Oil prices slipped on Tuesday after the Organization of the Petroleum Exporting Countries and its allies, OPEC+, agreed to pause output hikes in the first quarter of next year as a signal of oversupply in the market.
Brent crude futures fell 15 cents, or 0.2%, to $64.74 a barrel by 05:05 AM WAT. U.S. West Texas Intermediate crude was down 14 cents, or 0.2%, at $60.91 a barrel. The OPEC Basket prices 0.26 cents or 0.39% to $66.72 per barrel.
On Sunday, the OPEC+ agreed to a small oil output increase for December and a pause in increases in the first quarter of 2025.
OPEC+ has raised output targets by around 2.9 million barrels per day – or around 2.7% of global supply – since April, but slowed the pace from October amid predictions of oversupply.
The bosses of some of Europe’s biggest energy producers on Monday, however, challenged forecasts of an oil supply glut next year, pointing to increasing demand and easing production.
The U.S. Department of Energy’s deputy secretary, James Danly, said he does not think there will be an oil glut in 2026.
The decision by OPEC+ to keep output targets steady came after Russia lobbied for the pause because it would struggle to increase exports due to Western sanctions, four OPEC+ sources said.
In October, both the U.S. and Britain imposed sanctions on Russia’s two major oil companies, Rosneft and Lukoil.
Market participants are now waiting for the latest U.S. inventory data from the American Petroleum Institute (API), due later in the day, for more trading cues.
A preliminary Reuters poll showed U.S. crude oil stockpiles were expected to have risen last week.
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