Oil prices edged lower on Tuesday, extending losses from the previous two sessions, as investor focus shifted from geopolitical tensions to supply-side dynamics. The decline came amid reports that OPEC+ is considering a modest production increase in December, which tempered optimism surrounding a potential U.S.-China trade breakthrough.
By early Tuesday morning (0106 GMT), Brent crude futures had slipped by 4 cents to $65.58 per barrel, while U.S. West Texas Intermediate (WTI) fell 9 cents to $61.22. According to analysts, traders are currently weighing the progress in U.S.-China trade negotiations against broader supply concerns, particularly those stemming from OPEC+ policy shifts and their potential impacts on oil prices.
OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, has reportedly been leaning toward a modest output hike in December, according to sources familiar with the discussions. This would mark a continuation of the group’s gradual reversal of production cuts that began in April, after years of curbing supply to stabilize global oil prices. While the proposed increase is expected to be smaller than previous hikes, it still acts as a headwind for prices by signaling greater supply ahead.
On the demand side, the market remains cautiously optimistic about a potential trade deal between the United States and China—the world’s two largest oil consumers. Presidents Donald Trump and Xi Jinping are scheduled to meet on Thursday in South Korea, a summit that could pave the way for easing trade tensions. Chinese Foreign Minister Wang Yi expressed hope that Washington would meet Beijing halfway to “prepare for high-level interactions,” during a phone call with U.S. Secretary of State Marco Rubio on Monday.
Oil Prices Stable from Last Week.
Last week, oil prices gained with both Brent and WTI posted their largest weekly gains since June, driven by geopolitical developments. President Trump imposed Ukraine-related sanctions on Russia, targeting major oil firms Lukoil and Rosneft—a move that surprised markets and raised concerns about potential supply disruptions. In response, Lukoil announced plans to divest its international assets, marking the most significant corporate action yet by a Russian oil company in reaction to Western sanctions tied to the ongoing war in Ukraine.
Analysts noted that the sanctions on Rosneft PJSC and Lukoil PJSC, companies responsible for nearly half of Russia’s crude exports, caught the market off guard and will affect oil prices. However, despite these geopolitical shocks, concerns about a global oil glut persist, especially in light of OPEC+’s production strategy and uncertain demand recovery.
Our analysts commented that while geopolitical tensions and trade diplomacy continue to influence sentiment, supply-side developments from OPEC+ and Russia remain the dominant force shaping short-term oil price movements. Traders and analysts will be closely monitoring the upcoming Trump-Xi summit and OPEC+ decisions for further direction.
