Global oil prices fell on Tuesday as concerns over weak fuel demand in the United States weighed heavily on market sentiment. The decline followed disappointing manufacturing data that pointed to an extended slowdown in industrial activity — coinciding with the country’s longest-running government shutdown.
Adding to downward pressure, eight member countries of the OPEC+ alliance — including both OPEC and non-OPEC producers — postponed previously planned output increases for early next year, a move interpreted by traders as an acknowledgment of potential oversupply risks.
Brent crude futures slipped 0.4% to $64.56 per barrel from Monday’s $64.81 close, while US benchmark West Texas Intermediate (WTI) also dropped 0.4% to $60.66 per barrel.
The OPEC+ coalition, led by Saudi Arabia and Russia and including Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman, had initially agreed to increase production by 137,000 barrels per day (bpd) in December. However, according to OPEC’s statement, the next phase of the output adjustment will now take effect in March 2026 instead of January, due to seasonal considerations.
The postponement — part of a gradual unwinding of the 1.65 million bpd voluntary output cuts introduced in April 2023 — triggered renewed speculation that global oil supply could outpace demand next year. Despite this, the alliance reiterated its commitment to flexibility, pledging to pause or reverse policy shifts if market conditions require.
On the demand side, weak US economic data added to the bearish outlook. The Institute for Supply Management (ISM) reported that its manufacturing Purchasing Managers Index (PMI) fell to 48.7 in October, signaling continued contraction for the eighth consecutive month. Analysts say this points to sluggish industrial activity and weaker fuel consumption during the winter season.
Investors are also monitoring the American Petroleum Institute’s (API) upcoming weekly crude inventory report for fresh supply cues. Market data shows that speculative traders increased their net long positions in ICE Brent by 119,046 contracts last week, leaving a total of 171,567 long positions as of Tuesday.
Meanwhile, Russia — one of the world’s top diesel exporters — faces ongoing production disruptions due to Western sanctions and Ukrainian drone attacks targeting its refining infrastructure. This has intensified uncertainty in the global middle distillate market.
According to Baker Hughes’ latest report, active US oil rig counts declined by six to 414 last week, reflecting continued pressure on drilling activity amid softer prices. Still, data from the US Energy Information Administration (EIA) shows that US crude production reached a record 13.79 million bpd in August, up 2.9% year-on-year.
Analysts warn that expectations of an oversupplied market in 2026 could limit US production growth, keeping global oil prices under sustained downward pressure.
