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
