Oil slipped as OPEC output plans offset trade and sanctions optimism

Oil prices edged lower on Monday as expectations of another OPEC+ supply increase outweighed optimism surrounding progress in US–China trade talks and renewed US sanctions on Russian producers.

Brent crude futures fell 32 cents, or 0.5%, to settle at $65.62 a barrel. 

West Texas Intermediate declined 19 cents, or 0.3%, to $61.31 a barrel.

Eight OPEC+ members are reportedly leaning toward approving a modest output increase for December, with Saudi Arabia leading efforts to reclaim market share. The potential adjustment would mark a third consecutive monthly rise in production, reinforcing market concerns over a looming supply surplus.

Sentiment found some support after Washington and Beijing signalled progress in negotiations ahead of a planned meeting between Presidents Donald Trump and Xi Jinping on Thursday. Officials said both sides had reached a “substantial framework” for a deal that could delay further US tariffs and prompt China to ease restrictions on rare-earth exports, helping calm broader market jitters.

Meanwhile, the US imposed new sanctions on major Russian energy companies, including Rosneft and Lukoil, in an effort to tighten pressure on Moscow. While analysts said the measures could disrupt some shipments, most Russian barrels are still expected to find buyers in Asia, limiting their immediate market impact.

The International Energy Agency maintained its view that global supply will continue to outpace demand this year, citing rising output from the Americas and OPEC members. Traders noted Brent continues to face resistance near the $65 level, reflecting persistent uncertainty over consumption recovery and the durability of recent gains.

Written by: Aiman Haikal