Oil prices extended their decline on Friday, adding to heavy losses from the previous session. Concerns about weakening U.S. demand and global oversupply outweighed fears of supply disruptions linked to the Middle East conflict and the war in Ukraine.
By 04:19 GMT, Brent crude futures slipped 49 cents, or 0.74%, to $65.88 a barrel, while U.S. West Texas Intermediate (WTI) fell 51 cents, or 0.82%, to $61.86.
“The U.S. inflation fight is far from over, which is dampening the demand outlook for oil in the world’s largest economy. Even geopolitical tensions are failing to support prices, as fundamentals point to oversupply and weak demand,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Fresh U.S. government data showed consumer prices in August rose at the fastest pace in seven months, while jobless claims surged. Markets now expect the Federal Reserve to cut interest rates next week in an effort to support economic growth, which could later boost oil demand.
Although crude gained up to 2% earlier this week on supply disruption risks, prices reversed sharply on Thursday after the International Energy Agency (IEA) projected global oil supply will rise faster than anticipated in 2025, driven by output increases from OPEC+ nations, including Russia.
In its own outlook, OPEC maintained strong oil demand growth forecasts for 2025 and 2026, stressing that the global economy remains on solid footing. However, analysts noted that the crude market is stuck between concerns of oversupply and short-term geopolitical risks, with the latter offering diminishing support to prices.
OPEC+ confirmed plans to raise output quotas from October, led by Saudi Arabia’s push to regain market share. Exports to China are set to climb to 1.65 million barrels per day in October, up from 1.43 million in September, according to trade sources.
Meanwhile, Russia—the world’s second-largest crude producer—saw oil revenues fall to one of the lowest levels since the Ukraine war began, the IEA said. In the U.S., the Energy Information Administration reported a 3.9 million-barrel increase in crude inventories last week, bringing total stocks to 424.6 million barrels.
