Oil prices slipped during Tuesday's Asian deals as investors interpreted OPEC+’s decision to pause output increases in the first quarter as a sign of growing oversupply in the market.
By 3:50 pm AEDT (4:50 am GMT), Brent crude futures declined 18 cents or 0.3% to $64.71 per barrel, while U.S. West Texas Intermediate crude eased 16 cents or 0.3% to $60.89.
The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, agreed on Sunday to a modest output rise for December, followed by a pause in production hikes through the first quarter of next year.
OPEC+ has lifted output targets by roughly 2.9 million barrels per day since April, about 2.7% of global supply, but began slowing the pace in October amid growing expectations of oversupply.
ANZ analysts commented: "Expectations of a large surplus have been priced into the market, so this move by OPEC should provide some price support.
"OPEC is aware of the impact its rising output will have on the market and will remain flexible so that the market remains balanced."
Despite those concerns, senior executives from several of Europe’s largest energy producers pushed back against predictions of a looming supply glut. They argued that strong demand and moderating production would help stabilise the market.
The U.S. Department of Energy’s deputy secretary, James Danly, also said he does not expect an oil glut in 2026.
OPEC+’s decision to hold steady on its output targets followed lobbying from Russia, which reportedly sought the pause as it continues to struggle with export limitations imposed by Western sanctions, according to four OPEC+ sources.
Both the United States and Britain introduced sanctions in October against Russia’s major oil producers, Rosneft and Lukoil, curbing their ability to sell crude internationally.
Traders are now awaiting the latest U.S. inventory figures from the American Petroleum Institute, due later on Tuesday, for further clues on short-term market direction.
