2025-11-04T05:13:03+00:00

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Shafaq News

Oil prices slipped on
Tuesday as investors read OPEC+’s decision to pause output hikes in the first
quarter as a signal of oversupply in the market.

Brent crude futures
fell 15 cents, or 0.2%, to $64.74 a barrel by 0405 GMT. U.S. West Texas
Intermediate crude was down 14 cents, or 0.2%, at $60.91 a barrel.

On Sunday,
the Organization of the Petroleum Exporting Countries and their allies, known
as OPEC+, agreed to a small oil output increase for December and a pause in
increases in the first quarter of next year.

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)
market may see this as the first sign of acknowledgement of potential
oversupply situation from the OPEC+ front, who have so far remained very
bullish on demand trends and ability of market to absorb the extra
barrels,” said Suvro Sarkar, energy sector team lead at DBS Bank.

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.

JP Morgan
said in a note that “our oil strategists maintain their view that while
the risk of disruption has increased, U.S. measures, along with complementary
actions by the UK and EU, will not prevent Russian oil producers from
operating.”

Despite the
current dip in oil prices, the sanctions could continue providing some price
support in the near term, said independent analyst Tina Teng.

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.

(Reuters)

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headline is edited by Shafaq News.