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Investing.com -- Oil prices rose Tuesday, extending gains following a smaller than feared output hike by a major producer group amid growing expectations of more western sanctions against Russia’s crude industry.
At 07:45 ET (11:45 GMT), Brent oil futures for November rose 0.8% to $66.52 a barrel and West Texas Intermediate crude futures rose 0.8% to $62.77 a barrel.
Both crude benchmarks rose over 1% on Monday following the OPEC’s decision over the weekend, which helped soothe some market concerns over a looming supply glut.
Potential tougher Russian sanctions
Western powers were seen considering even tougher sanctions against Russia’s oil industry, after Moscow over the weekend launched its biggest ever air attack on Ukraine.
Trump signaled that he was ready to move on to the “second phase” of sanctions against Russia, although he did not specify what this would entail. The U.S. President said he was meeting with European leaders soon, and that he also intended to engage in more dialogue with Russian President Vladimir Putin.
While Trump has maintained a harsh rhetoric against Putin, he has so far allowed several self-imposed deadlines for punishing Moscow to pass without action. The two had met in Alaska in August, but had marked little progress towards a Russia-Ukraine ceasefire.
Trump had in late-August imposed 50% tariffs on India to curb its buying of Russian oil, which he claimed was single-handedly funding the Ukraine war.
But India has so far signaled that it will not cease its buying. Trump also declined to impose similar sanctions against China, another major buyer of Russian crude.
Oil heady on modest OPEC+ hike, softer dollar
Oil prices extended gains from Monday, after the Organization of Petroleum Exporting Countries and allies, a group known as the OPEC+, agreed to hike production by 137,000 barrels per day from October.
The hike is much lower than monthly increases of about 555,000 bpd in September and August and the 411,000 bpd hike seen in July and June.
The October move indicated some caution in the OPEC+ over a looming supply glut in oil markets, especially amid high production in non-OPEC+ states such as the United States.
But the cartel has steadily increased production so far in 2025, as it moves to regain a greater market share and offset persistent oil price weakness with greater sales volumes.
HSBC’s latest oil market supply and demand model envisions OPEC+ gradually unwinding 1.65 million barrels per day in "first-phase" voluntary production cuts over a 12-month period, the bank said in a note on Tuesday.
The bank’s oil market model had previously assumed that OPEC+ would take a breather after unwinding 2.2 million barrels per day (bpd) of cuts, and wait until 2026 to add more barrels.
"However, the group seems undeterred by negative demand seasonality and the prospect of a market surplus," HSBC said in the note.
Ambar Warrick contributed to this article