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Oil prices are little different from one week ago, but concerns about oversupply persist

After three days of declining oil prices, Tuesday's price was little changed. The market was still concerned about oversupply after OPEC+ decided to increase output by a large amount in September. However, the possibility of further Russian supply disruptions helped the market.

Brent crude futures remained unchanged at $68.76 per barrel at 0036 GMT, while U.S. West Texas intermediate crude fell 2 cents or 0.03% to $66.27 per barrel.

Both contracts dropped by more than 1 percent in the session before, settling at their lowest levels in a full week.

The Organization of the Petroleum Exporting Countries (OPEC+) and its allies pump about half of the oil in the world. They have been reducing production for years to help the market. But this year, they increased output to regain some market share.

In a recent decision, OPEC+ decided on Sunday to increase oil production by 547,000 barges per day in September.

Analysts caution that the actual amount returned to the market may be lower.

The U.S. is also urging India to stop purchasing Russian oil, as Washington tries to pressure Moscow to reach a peace agreement with Ukraine. This has increased concerns about a disruption in supply.

Donald Trump, the U.S. president, has threatened to impose secondary tariffs of 100% on Russian crude purchasers. The 25% tariff announced in July was followed by a similar one on Indian imports.

India is the largest buyer of Russian crude oil by sea. It imported about 1.75 million barrels per day (bpd) of Russian oil between January and June of this year. This represents an increase of 1% compared to a year earlier, according to trade sources.

Since the invasion of Ukraine in 2022, India has become the largest buyer of oil from the Kremlin. "Any disruption in these purchases would force Russia find alternative buyers among an increasingly small group" of allies, ANZ senior commodities strategist Daniel Hynes wrote.

Analysts fear that the latest U.S. Tariffs against its trading partners could dampen economic growth, and also fuel demand. (Reporting by Anjana Anil in Bengaluru; Editing by Christian Schmollinger)

(source: Reuters)