(Reuters) -Oil prices were little changed early on Tuesday as markets weighed OPEC+’s decision to pause output hikes in the first quarter even as concerns over a looming supply glut persisted.
Brent crude futures fell 9 cents, or 0.1%, to $64.80 a barrel by 0110 GMT. U.S. West Texas Intermediate crude was down 10 cents, or 0.2%, at $60.95 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.
“It certainly suggests that OPEC+ recognizes the oversupply, and likely suggests that they do not want to send oil prices far lower (i.e. below $50). We expect this possible floor to be viewed positively by investors,” Bank of America said in a note.
The bosses of some of Europe’s biggest energy producers on Monday challenged forecasts of an oil supply glut next year, pointing to increasing demand and easing production. The U.S. Department of Energy’s deputy secretary, James Danly, said he does not think there will be an oil glut in 2026.
The decision by OPEC+ to keep output targets steady came after Russia lobbied for the pause because it would struggle to increase exports due to Western sanctions, four OPEC+ sources said.
In October, both the U.S. and Britain imposed sanctions on Russia’s two major oil companies, Rosneft and Lukoil.
JP Morgan said in a note that “our oil strategists maintain their view that while the risk of disruption has increased, U.S. measures, along with complementary actions by the UK and EU, will not prevent Russian oil producers from operating.”
Market participants are now waiting for the latest U.S. inventory data from the American Petroleum Institute (API), due later in the day, for more trading cues. A preliminary Reuters poll showed U.S. crude oil stockpiles were expected to have risen last week. [EIA/S]
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Himani Sarkar)
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