Oil prices drop amid OPEC+ output increase plans

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Oil prices fell for the third consecutive day as traders assessed OPEC+ plans to increase production amid pressures from U.S. sanctions on Russia and optimism regarding U.S.-China trade talks.Brent crude futures dropped to $65.43 per barrel, down 0.28%, while West Texas Intermediate crude fell to $61.25 per barrel, a decline of 0.10%.

Market concerns about potential oversupply are influencing this sustained weakness as OPEC+ prepares for another production increase.

Eight OPEC+ nations are reportedly leaning towards approving a modest output increase of around 137,000 barrels per day for December. The decision, driven by Saudi Arabia’s desire to regain market share, reflects ongoing efforts to adjust production after years of cuts to support prices.

Since April, OPEC+ has raised production targets by over 2.7 million barrels per day, nearly halving the previous cumulative cuts agreed upon.

Industry analysts note that additional supply from OPEC+ has contributed to a five-month low in oil prices due to concerns about a developing glut.

Market Uncertainty

The oil market faces ongoing uncertainty from U.S. sanctions placed on Russia’s largest oil companies, Rosneft and Lukoil. These sanctions aim to increase pressure on Russia’s energy sector, further complicating the market situation.

Major oil buyers, including state-owned Chinese companies, have started suspending Russian oil purchases, indicating potential disruptions to the market.