Oil prices dropped on Tuesday after the Organization of the Petroleum Exporting Countries and its allies, OPEC+, decided to halt output increases in the first quarter of next year, signaling potential oversupply in the global market.
Brent crude futures fell by 15 cents, or 0.2%, to $64.74 per barrel as of 05:05 AM WAT, while U.S. West Texas Intermediate crude declined by 14 cents, or 0.2%, to $60.91 a barrel. The OPEC Basket also dipped 0.26 cents or 0.39% to $66.72 per barrel.
On Sunday, OPEC+ agreed to a modest oil output hike for December, followed by a pause in production increases during the first quarter of 2025.
Since April, OPEC+ has raised output targets by roughly 2.9 million barrels per day — about 2.7% of global supply — but began slowing production growth in October amid warnings of a market glut.
However, executives from some of Europe’s largest energy companies disputed these projections on Monday, citing strong demand growth and reduced production as reasons the market might remain balanced.
The U.S. Department of Energy’s deputy secretary, James Danly, also stated that he does not anticipate an oil glut in 2026.
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According to four OPEC+ sources, the group’s decision to maintain current output levels followed lobbying from Russia, which is finding it difficult to expand exports due to Western sanctions.
In October, both the U.S. and the U.K. imposed sanctions on Rosneft and Lukoil, Russia’s two leading oil producers.
Market watchers are now awaiting the American Petroleum Institute’s (API) latest U.S. inventory data, expected later in the day, for fresh trading signals.
A preliminary Reuters survey indicated that U.S. crude stockpiles likely rose in the previous week.