Oil prices drop over supply, strong dollar

Oil prices fell over 1% on Tuesday, November 4, 2025, as OPEC+’s decision to suspend output hikes in the first quarter of 2026 alongside a stronger dollar weighed on the market.

Brent crude futures fell 82 cents, or around 1.3%, to $64.07 a barrel by 0905 GMT, while U.S. West Texas Intermediate crude was down 84 cents, or 1.4%, at $60.21 a barrel.

An analyst at PVM Oil Associates, John Evans, said: “The succession of poor manufacturing PMIs from Asia and then the U.S. ISM is a worry for oil demand. So is the ever present market upsetting tariff threat.

“The renaissance of the U.S. dollar is another suppressant for oil prices at the moment and we anticipate a resumption of a grind lower in the here and now.”

On Sunday, the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, agreed to a small oil output increase for December and a pause in increases in the first quarter of next year.

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Despite the current dip in oil prices, the sanctions on Russia’s Rosneft and Lukoil could continue providing some price support in the near term, independent analyst Tina Teng told Reuters.

Meanwhile, the dollar hovered near a three-month high as a divided Federal Reserve – on whether or not to cut rates again in December – prompted traders to rein in interest rate cut wagers.

A higher dollar makes dollar-priced assets more expensive to those holding other currencies.

In Asia, Japan’s manufacturing activity shrank in October at the fastest pace in 19 months on a slump in demand in key automotive and semiconductor sectors, a private-sector survey showed.

Market participants are now awaiting the latest U.S. inventory data from the American Petroleum Institute (API), due later in the day.

The Star