By Seher Dareen
LONDON (Reuters) – Oil prices fell more than 1% on Tuesday as OPEC+’s decision to pause production increases in the first quarter of next year along with weak manufacturing data and a stronger dollar weighed on the market.
Brent crude futures fell 90 cents, or 1.4%, to $63.99 a barrel by 1056 GMT. U.S. West Texas Intermediate crude fell 95 cents, or about 1.6%, to $60.10 a barrel.
“The succession of bad Asian manufacturing PMIs and then the US ISM is a concern for oil demand. So is the ever-present market-disrupting tariff threat,” said John Evans, analyst at PVM Oil Associates.
“The revival of the US dollar is another suppressive factor for oil prices at the moment and we anticipate a resumption of the decline in the here and now.”
On Sunday, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, agreed to a small increase in oil production for December and a pause in increases in the first quarter of next year.
Additionally, the boost to oil prices from U.S. sanctions on Russian energy companies Lukoil and Rosneft was fading, chief commodities analyst Bjarne Schieldrop of SEB Research said in a note.
“On November 21, when the sanctions (on other companies that continue to trade with Russian companies) come into force, they will probably evaporate, disappear or be removed in time.”
Also weighing on the market was a stronger dollar that held near a three-month high as a divided Federal Reserve – over whether to cut rates again in December – led traders to curb bets on interest rate cuts. (US DOLLAR/)
A higher dollar makes dollar-priced assets more expensive for those who own other currencies.
In Asia, Japan’s manufacturing activity contracted in October at the fastest pace in 19 months due to a drop in demand in key automotive and semiconductor sectors, a private sector survey showed.
Market participants are now awaiting the latest US inventories data from the American Petroleum Institute (API), which will be released later in the day. A preliminary Reuters poll showed that U.S. crude oil stockpiles were expected to have increased last week. (EIA/S)
(Reporting by Seher Dareen in London, Ashitha Shivaprasad in Bengaluru and Emily Chow in Singapore; Editing by Ros Russell and Louise Heavens)