Oil prices extended losses on Friday as concerns over oversupply and weakening U.S. demand outweighed geopolitical tensions in the Middle East and Ukraine.
Brent crude fell 55 cents, or 0.83%, to $65.82 a barrel, News.Az reports, citing Reuters.
U.S. West Texas Intermediate (WTI) dropped 57 cents, or 0.91%, to $61.80 a barrel.
“The U.S. inflation battle doesn’t quite look won, which dampens the demand outlook for oil from the world’s largest economy,” said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.
Even ongoing geopolitical unrest has failed to support prices, with fundamentals pointing to oversupply and subdued demand.
The International Energy Agency (IEA) reported that global oil supply is set to rise faster than expected this year due to planned output increases by OPEC+ members, including Russia. OPEC+ recently decided to further raise production quotas starting in October, with Saudi Arabia aiming to regain market share.
Saudi crude exports to China are expected to surge to 1.65 million barrels per day in October, up from 1.43 million bpd in September, according to trade sources. Meanwhile, Russian oil revenues dropped in August to one of the lowest levels since the start of the Ukraine war.
Government data released on Thursday showed U.S. consumer prices rose in August at the fastest pace in seven months, while first-time unemployment claims increased. This has fueled expectations that the Federal Reserve may cut interest rates next week to stimulate economic growth, potentially boosting oil demand.
U.S. crude stocks also rose last week by 3.9 million barrels, reaching 424.6 million barrels, according to the Energy Information Administration.
“The crude market keeps toggling between surplus supply pressures and short-term disruption concerns, but geopolitical tensions are offering diminishing support,” SDIC Futures said in a daily report.
Earlier this week, oil prices had briefly gained up to 2% due to potential disruptions from conflicts, but the rise was erased as supply concerns took over. Analysts note that the market is now balancing between oversupply risks and short-term geopolitical tensions.
