Oil prices fell slightly on Tuesday as OPEC's plan to increase production offset optimism about a potential trade deal between the US and China, while investors also assessed the effectiveness of sanctions against Russia, UNN reports with reference to Reuters.
Details
Brent crude futures fell 3 cents to $65.59 a barrel by 03:59 GMT (05:59 Kyiv time). US West Texas Intermediate crude futures fell 5 cents to $61.26.
"Traders were assessing progress in US-China trade talks and the broader supply outlook," ANZ said in a morning note.
Keeping prices in check, OPEC+ is leaning towards another small production increase in December, four sources familiar with the talks said. After cutting production for several years in an attempt to support the oil market, the group began reversing those cuts in April.
OPEC+ prepares small oil output hike in December – delegates27.10.25, 21:06 • [views_4127]
The market is supported by the prospect of a trade deal between the US and China, the world's two largest oil consumers. A meeting between US President Donald Trump and Chinese President Xi Jinping is scheduled for Thursday in South Korea. Foreign Minister Wang Yi told US Secretary of State Marco Rubio in a phone call on Monday that Beijing hopes Washington can meet it halfway and "prepare for high-level engagement."
Last week, Brent and WTI oil prices saw their biggest weekly gain since June after Trump imposed Ukraine-related sanctions against Russia for the first time in his second term, targeting oil companies Lukoil and Rosneft.
Following the sanctions, Russia's second-largest oil producer, Lukoil, announced on Monday that it would sell its foreign assets. This is the most serious action by a Russian company to date following Western sanctions imposed over Russia's war in Ukraine, which began in February 2022.
Sanctions against oil-exporting countries could lead to higher oil prices, but the effect would be limited due to excess capacity, International Energy Agency Executive Director Fatih Birol said on Tuesday.
Market participants generally assess the sanctions as having a short-term effect. As Haitong Securities notes, any medium- and long-term supply losses appear limited, and an oversupply is likely to put pressure on prices.