The oil market closed marginally lower on Monday as a sub-group under the Organisation of the Petroleum Exporting Countries and allies (OPEC+) plans to increase production once again.
Brent crude reacted with a 32 cents or 0.5 per cent decline to finish at $65.62 a barrel, and the US West Texas Intermediate (WTI) crude lost 19 cents or 0.3 per cent to trade at $61.31 per barrel.
Reuters reported that eight OPEC+ nations are leaning towards making another modest increase in oil output for December when they meet on Sunday as Saudi Arabia pushes to reclaim market share.
The eight are likely to agree on Sunday to increase December output targets by another 137,000 barrels per day.
In a series of monthly increases, the sub-group has boosted output targets by a total of over 2.7 million barrels per day equivalent to 2.5 per cent of global supply. That is just under half the 5.85 million barrels per day cumulative cuts in supply the group had agreed in preceding years.
The wider OPEC+ consists of 22 members, including Nigeria, and pumps about half the world’s oil.
This development outweighed hopes of a trade deal framework between the US and China and renewed US sanctions on Russia, which usually gives support to prices.
US President Donald Trump and his Chinese counterpart Xi Jinping are due to meet on Thursday to decide on that could pause tougher US tariffs and China’s rare-earth export curbs.
This has eased market jitters around a trade war.
The market also continues to weigh the outcome after the US hit Russia’s major oil companies with sanctions on Wednesday, which could hurt Russia’s oil exports if enforced.
Meanwhile, persistent expectations of oversupply in the near term continues to grip the oil market.
According to Mr Fatih Birol, the Executive Director of the International Energy Agency (IEA), growing production from the Americans will moderate oil prices in the coming days and weeks, adding that he doesn’t expect a major shake-up on the market in the near term.
Concerns over lacklustre demand have weighed on the market, with Brent falling to its lowest since May earlier this month.