Oil prices continue to decline amid widespread oversupply and concerns about US demand
Oil prices continue to decline amid concerns about oversupply and concerns about US demand. This was offset by fears of supply disruptions stemming from the conflict in the Middle East and the war in Ukraine; oil prices fell on Friday, contributing to the large declines in the previous session.
Brent crude futures were down 49 cents, or 0.74%, to $65.88 a barrel by 04:19 GMT, while WTI Crude fell 51 cents, or 0.82%, to $61.86.
The US's war with inflation appears not to be over, negatively impacting the outlook for oil demand from the world's largest economy. Even the intensity of geopolitical turmoil is failing to support oil prices, as fundamental indicators point to oversupply and weak demand.
US consumer prices are rising, and a Fed rate cut is likely. Official reports released Thursday showed that US consumer prices rose by the most in seven months in August, and initial applications for unemployment benefits surged last week. This fueled expectations that the Federal Reserve would cut interest rates next week to support economic growth, which would in turn boost oil demand.
Oil prices rose as much as 2% this week due to the possibility of disruptions to production or trade flows due to conflict and war, but the indexes began to decline on Thursday and have since erased the week's earlier gains.
The losses began after the International Energy Agency (IEA) indicated in its monthly report that world oil supplies would increase faster than expected this year due to planned production increases by OPEC+.
In its own report, OPEC made no changes to its relatively high global oil demand growth forecasts for 2025 and 2026, stating that the world economy continues to grow strongly.
OPEC+ decided on Sunday to further increase its oil production quotas starting in October, as group leader Saudi Arabia strives to regain market share.
Saudi Arabia is poised to increase its crude oil exports to China. State-controlled energy company Aramco will begin shipping approximately 1.65 million barrels per day in October, a sharp increase from the 1.43 million barrels per day allocated in September.
In Russia, the world's second-largest crude oil producer after the United States by 2024, revenue from crude oil and petroleum product sales fell in August to one of the lowest levels since the beginning of the conflict in Ukraine, according to the International Energy Agency (IEA).
US crude oil inventories rose by 3.9 million barrels last week to 424.6 million barrels, according to a Wednesday report from the Energy Information Administration (EIA).
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