Oil prices slipped on Tuesday due to rising supply from the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) and worries of weaker global demand.
Brent crude futures lost $1.12 or 1.63 per cent to trade at $67.64 a barrel and the US West Texas Intermediate (WTI) crude futures slipped by $1.13 or 1.7 per cent to sell for $65.16 per barrel.
OPEC+ agreed on Sunday to raise oil production by 547,000 barrels per day for September, a move ending its most recent output cut earlier than planned.
In a statement following the meeting, OPEC+ cited a healthy economy and low stocks as reasons behind its decision.
Market analysts warned that the significant increase in OPEC supplies is weighing on the market after it hiked consecutively from May.
The eight OPEC+ sub-group countries are scheduled to meet again on September 7, when they may consider reinstating another layer of output cuts totalling around 1.65 million barrels per day.
OPEC+ still has a 2-million-barrels per day cut across all members, which also expires at the end of 2026.
The group, which includes Nigeria, had been cutting production for several years to support oil prices. However, it reversed course this year in a bid to regain market share, spurred in part by calls from US President Donald Trump for OPEC to ramp up production.
Also weighing on prices, uncertainty over the Trump administration’s tariff policy on businesses continued to show as US services sector activity unexpectedly flatlined in July with little change in orders and a further weakening in employment even as input costs climbed by the most in nearly three years.
President Trump on Tuesday again threatened higher tariffs on Indian goods over the country’s Russian oil purchases over the next 24 hours.
India, however, vowed to protect its economic interests, deepening a trade rift between the two countries.
The American President also said declining energy prices could pressure Russian President Vladimir Putin to halt the war in Ukraine.
Since India is the biggest buyer of seaborne crude from Russia, importing about 1.75 million barrels per day from January to June this year, this development could see oil prices rise instead.
US crude inventories fell by 4.2 million barrels last week, according to data from American Petroleum Institute (API) on Tuesday. The official US Energy Information Administration (EIA) data is due to release later on Wednesday.