Oil prices edged higher on Friday after three consecutive days of losses, supported by mild buying interest but weighed down by concerns over oversupply and slowing U.S. demand. Despite Friday’s uptick, both major benchmarks remained on track for a second straight weekly decline.
Brent crude futures rose 28 cents, or 0.44%, to $63.66 a barrel at 04:21 GMT, while U.S. West Texas Intermediate (WTI) climbed 29 cents, or 0.49%, to $59.72 a barrel. Both Brent and WTI were set to end the week down about 2%, as major global producers continued to increase output.
According to IG Markets analyst Tony Sycamore, oil’s price slide has been driven by a surprise 5.2 million-barrel rise in U.S. crude inventories, which reignited concerns about excess supply. “This has been amplified by risk-aversion flows, a stronger dollar, and the ongoing U.S. government shutdown, which continues to cloud economic activity,” Sycamore added.
Oversupply and Weak Demand Pressure Oil Markets
Data from the Energy Information Administration (EIA) showed that U.S. crude stockpiles rose more than expected last week due to higher imports and lower refinery utilization. However, gasoline and distillate inventories both declined.
Concerns also grew about the potential economic fallout from the longest government shutdown in U.S. history, as it continued to disrupt federal operations and dampen sentiment. The Trump administration ordered flight reductions at major airports due to staff shortages, while private reports pointed to a weaker U.S. labor market in October.
OPEC+ Output Decisions and Market Reactions
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, agreed on Sunday to slightly increase production in December, but paused further hikes for the first quarter of next year to prevent a potential glut.
Following the announcement, Saudi Arabia, the world’s top oil exporter, cut crude prices for Asian buyers in December in response to a well-supplied market.
Meanwhile, ongoing Western sanctions on Russia and Iran have disrupted oil shipments to major importers such as China and India, offering limited support to global prices.
Swiss commodity trader Gunvor said Thursday it withdrew its proposal to purchase the foreign assets of Russia’s Lukoil after the U.S. Treasury labeled the company a “puppet” of Moscow and opposed the deal.
“This shows the U.S. is keeping maximum pressure on Russia, with tighter enforcement on Rosneft and Lukoil sanctions,” said Vandana Hari, founder of Vanda Insights. “But that support is fragile — oversupply remains the main factor shaping sentiment.”
China’s Oil Imports Rise in October
Data from China’s General Administration of Customs showed the country’s crude imports rose 2.3% month-on-month and 8.2% year-on-year in October to 48.36 million tons, supported by high refinery utilization rates and steady industrial demand.
