Oil slips on OPEC+ output hike, supply glut fears

Oil prices edged lower on Tuesday as investors weighed a smaller-than-expected increase to OPEC+ output in November against signs of a potential supply glut.

Brent crude futures were down 30 cents, or 0.46%, to $65.17 a barrel at 1:06 p.m. EDT. U.S. West Texas Intermediate crude was down 20 cents, or 0.32%, to $61.49.

Both contracts settled more than 1% up in the previous session after the Organization of the Petroleum Exporting Countries plus Russia and some smaller producers, together known as OPEC+, decided to increase collective oil production by 137,000 barrels per day, starting in November.

The move was in contrast to market expectations for a more aggressive increase, a sign that the group remains cautious in light of predictions for a global supply surplus in the fourth quarter as well as next year, said ING analysts.

Market sentiment remains subdued, in particular after Saudi Arabia opted to keep the official selling price of its flagship crude to Asia unchanged, defying analyst expectations for an increase, StoneX analyst Alex Hodes said in a note on Tuesday.

On the demand side, India's fuel demand rose by 7% year-on-year in September, according to data from the Petroleum Planning and Analysis Cell of the country's oil ministry.