Oil prices edged lower on Tuesday, extending losses for a third consecutive session, as investor optimism over a potential U.S.-China trade breakthrough was tempered by reports that OPEC and its allies plan to increase output in December.
Brent crude futures slipped by 4 cents to $65.58 a barrel at 0106 GMT, while U.S. West Texas Intermediate (WTI) crude fell 9 cents to $61.22.
“Traders weighed up progress in U.S.-China trade talks and the broader outlook for supply,” ANZ said in a morning note.
According to four sources familiar with the discussions, OPEC+—which includes members of the Organization of the Petroleum Exporting Countries and partners such as Russia—is leaning toward a modest production boost next month. The group began rolling back years of output cuts in April, after efforts to stabilize the oil market.
On the demand side, optimism persists as U.S. President Donald Trump and China’s President Xi Jinping prepare to meet in South Korea on Thursday, raising hopes of progress between the world’s two largest oil consumers. Chinese Foreign Minister Wang Yi urged Washington to “meet Beijing halfway” during a phone call with U.S. Secretary of State Marco Rubio on Monday.
Last week, both Brent and WTI posted their biggest weekly gains since June, fueled by fresh U.S. sanctions on Russia’s major oil firms, Lukoil and Rosneft, marking the first Ukraine-related penalties in Trump’s second term. Following the move, Lukoil announced plans to sell its international assets, signaling a significant shift in response to Western pressure.
“The market was surprised by the U.S. move to sanction two of Russia’s biggest oil producers, Rosneft PJSC and Lukoil PJSC, which together make up nearly half of the country’s total crude exports. However, concerns over a glut of oil remain,” ANZ added.
Despite geopolitical tension and trade optimism, oil markets continue to grapple with uncertainty over supply dynamics, leaving traders cautious ahead of key policy decisions and diplomatic developments later this week.