Oil dips as OPEC output plans offset US-China trade optimism

Following the sanctions, Russia's second-largest oil producer, Lukoil said on Monday it would sell its international assets. This is the most consequential action so far by a Russian company in the wake of Western sanctions over Russia's war in Ukraine, which started in February 2022.

Oil prices slipped on Tuesday, extending falls from the two previous sessions, as pressure from plans by OPEC to boost output offset optimism over a potential U.S.-China trade deal.

Brent crude futures fell 4 cents to $65.58 a barrel by 0106 GMT. U.S. West Texas Intermediate crude futures were down 9 cents at $61.22.

"Traders weighed up progress in U.S.-China trade talks and the broader outlook for supply," ANZ said in a morning note.

Acting as a headwind for prices, OPEC+, which groups the Organization of Petroleum Exporting Countries and allies including Russia, is leaning towards another modest output boost in December, four sources familiar with the talks said. Having curbed production for several years in a bid to support the oil market, the group started reversing those cuts in April.

Supporting the market is the prospect of a trade deal between the U.S. and China, the world's two biggest oil consumers, with President Donald Trump and President Xi Jinping due to meet on Thursday in South Korea. Beijing hopes Washington can meet it halfway to "prepare for high-level interactions" between the two countries, Foreign Minister Wang Yi told U.S. Secretary of State Marco Rubio in a phone call on Monday.

Last week, Brent and WTI registered their biggest weekly gains since June, after Trump imposed Ukraine-related sanctions on Russia for the first time in his second term, targeting oil companies Lukoil and Rosneft.

Following the sanctions, Russia's second-largest oil producer, Lukoil said on Monday it would sell its international assets. This is the most consequential action so far by a Russian company in the wake of Western sanctions over Russia's war in Ukraine, which started in February 2022.

"The market was surprised by the U.S. move to sanction two of Russia’s biggest oil producers, Rosneft PJSC and Lukoil PJSC, which together make up nearly half of the country’s total crude exports. However, concerns over a glut of oil remain," ANZ added.