Oil prices posted their sharpest daily decline since August 1 as concerns over rising supply and weak demand weighed heavily on the market.
Brent crude oil, against which Nigerian crude oil is priced, dipped by 94 cents or 1.38 percent to $67.03 per barrel on Tuesday, while the more active December contract lost $1.11 or 1.65 percent to settle at $65.98.
U.S. West Texas Intermediate (WTI) crude dropped by $1.10 or 1.73 percent to $62.35 per barrel. Both benchmarks had already shed more than 3 percent in the previous session.
The sell-off comes ahead of Sunday’s OPEC+ meeting, where the group is expected to discuss a larger output increase for November.
Sources familiar with the talks said the alliance could approve a hike of 411,000 barrels per day (bpd), three times the 137,000 bpd increase set for October.
Analysts warn that such a strategy could pressure margins for high-cost U.S. shale producers, forcing them to cut back on record output levels.
StoneX analyst Alex Hodes noted that an aggressive OPEC+ expansion would shift market balance firmly toward oversupply.
Further bearish sentiment came from the resumption of crude flows from Iraq’s Kurdistan region to Turkey after a 30-month halt. The restart followed an interim agreement with Baghdad, boosting near-term supply.
At the same time, concerns over global demand persist. Investors remain cautious about weaker consumption in the face of sluggish economic growth, the potential impact of a U.S. government shutdown, and geopolitical uncertainty
While Ukraine’s drone attacks on Russian refineries continue to raise supply risks, expectations of oversupply are dominating market sentiment.
Market watchers also highlighted diplomatic developments, with U.S. President Donald Trump securing Israeli Prime Minister Benjamin Netanyahu’s support for a Gaza peace initiative.
Analysts at PVM suggested that a peace deal could restore shipping traffic through the Suez Canal and ease part of the geopolitical risk premium currently priced into oil.
With both demand uncertainty and increasing supply prospects weighing heavily, the market outlook remains bearish heading into the OPEC+ meeting.