Morning Highlights: Oil Falls Over 1% as OPEC+ Pause, Stronger Dollar Pressure Market

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Tuesday, November 4, 2025

Oil prices fell more than 1% on Tuesday, extending losses after OPEC+ agreed to pause output hikes in early 2026, while weak manufacturing data in Asia and a firmer U.S. dollar added to bearish sentiment. Traders also awaited U.S. inventory data for signs of whether stockpiles are beginning to build amid growing signs of an oversupplied market.

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Market Snapshot

• Brent crude futures down 82 cents, or 1.3%, to $64.07/bbl by 6:15 EST.

• WTI futures down 84 cents, or 1.4%, to $60.21/bbl.

• OPEC+ agreed Sunday to raise output slightly in December, then pause hikes in Q1 2026.

• The U.S. dollar hovered near three-month highs as Fed divisions cloud the December policy outlook.

• Preliminary Reuters poll shows U.S. crude inventories likely rose last week; API data due later Tuesday.

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OPEC+ and Market Outlook

• Analysts view the OPEC+ decision as a signal that producers are acknowledging oversupply risks after months of bullish guidance.

• DBS Bank’s Suvro Sarkar said the move “marks the first sign of acknowledgement of a potential oversupply situation.”

• Independent analyst Tina Teng noted that U.S. sanctions on Russia’s Rosneft and Lukoil may still lend some near-term price support.

• The market remains cautious ahead of Wednesday’s Federal Reserve commentary and the official U.S. EIA stock report.

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Macro and Currency Pressure

• The U.S. dollar strengthened as Fed officials remained divided on another rate cut in December, leading traders to scale back easing bets.

• A stronger dollar makes dollar-denominated commodities like oil more expensive for holders of other currencies, pressuring prices further.

• Japan’s factory activity contracted in October at the fastest pace in 19 months, weighed by weak demand in automotive and semiconductor sectors.

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Geopolitics and Sanctions

• Ukrainian drone strikes reportedly set a Russian oil tanker ablaze and damaged port facilities in Tuapse, a key Black Sea export hub.

• U.S. sanctions on Rosneft and Lukoil continue to disrupt trade flows, adding uncertainty to Russian export volumes.

• Despite these risks, abundant non-OPEC+ supply and slowing Asian demand are keeping a lid on prices.

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Corporate and Supply Developments

• Saudi Aramco reported a 2.3% drop in Q3 profit, citing lower crude prices.

• BP posted stronger-than-expected quarterly earnings but gave no update on the possible sale of its Castrol lubricants unit.

• Nigeria’s NNPC announced plans to raise output to 2 million bpd within two years.

• China’s Sinopec is entering the battery materials sector through a new venture with South Korea’s LG Chem, signaling diversification away from fossil fuels.

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OPEC+’s signal of supply restraint failed to lift sentiment amid global growth concerns, strong dollar headwinds, and mounting evidence of excess crude in the system. Markets now turn to U.S. inventory data and upcoming Fed commentary for cues on near-term direction.