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Oil prices steady as the market chews on OPEC+ production hike and supply glut fears

Oil prices were steady on Tuesday, with sentiment toward a smaller-than-anticipated OPEC+ output hike dulled by weakening global demand and the potential for a supply glut.

Brent crude futures rose 1 cent or 0.02% to $65.48 per barrel at 0014 GMT. U.S. West Texas Intermediate Crude was unchanged at $60.69 per barrel.

Both contracts were settled at a higher level than the previous session.

Crude oil prices rose after OPEC announced a production increase that was smaller than expected. Oil market analysts had been expecting a significant increase in quotas as the members of the group met over the weekend to discuss their agreement on supply.

This has averted fears of a bigger surplus in the coming months than what the market expects.

OPEC+, the Organization of the Petroleum Exporting Countries and Russia plus some smaller producers – known as OPEC+ – decided on Sunday to increase their collective oil production by 137,000 barils per day beginning in November.

The group increased its oil production targets this year by over 2.7 million barrels per day, which is equivalent to around 2.5% of the global demand.

The geopolitical situation has kept prices stable, as the conflict between Russia and Ukraine is affecting energy assets. It also creates uncertainty about Russian crude oil supply.

Two industry sources reported on Monday that the Russian Kirishi oil refining plant halted CDU-6's most productive distillation after a drone attack on October 4 and a subsequent fire. The unit is expected to recover in about a month.

Oil prices are still under pressure because investors believe that there will be a surplus of oil as both OPEC+ as well as non-OPEC+ producers increase their output. Analysts said that any slowdown in the demand caused by weak economic growth due to U.S. tariffs would likely exacerbate this surplus. (Reporting and editing by Christopher Cushing in Bengaluru, Anjana Anil)

(source: Reuters)