Oil prices slipped early on Tuesday, paring the previous session's 3 percent gain, as an OPEC+ deal to cut output by 100,000 barrels per day in October was seen as a largely symbolic move to stem the market's recent slide.

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Brent crude futures fell 33 cents, or 0.3 percent, to $95.44 a barrel at 00:54 GMT.

US West Texas Intermediate (WTI) crude futures inched up from Monday to $89.13 a barrel, and were up $2.26, or 2.6 percent, from Friday's close. There was no settlement on Monday, the US Labor Day holiday.

The Organization of Petroleum Exporting Countries and allies led by Russia, together called OPEC+, decided to reverse a 100,000 bpd increase for September after top producer Saudi Arabia and other members voiced concern about the slump in prices since June despite tight supply.

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Analysts, who had not expected the agreement even after Saudi Arabia had said it wanted to shore up prices, said the cut was mostly symbolic given that OPEC+ has been unable to meet its production targets.

"This move shows they remain serious about supporting prices, despite the fact the cut will have little impact on the supply/demand dynamics in the short term," ANZ Research analysts said in a note.

Further supporting prices, the European Union's foreign policy chief said he was less hopeful about reaching an agreement soon to revive a nuclear deal with Iran, which would delay any return of around 1 million bpd of Iranian crude to the market.

Westpac senior economist Justin Smirk said a return of Iranian oil would probably just offset lost production from Russia, so broader supply is unlikely to change much.

He said OPEC+ should be satisfied that oil is holding around $90 a barrel.

"You've got growth shocks, rate rises and a strong US dollar and prices haven't fallen away in a meaningful sense - reflecting a tight market. I can't see why OPEC would want to change that," Smirk said.

(Edited by : Sangam Singh)

First Published:Sept 6, 2022 6:44 AM IST