Beijing — Oil prices fell on Friday, adding to big declines in the previous session, as concerns about the possible softening of US demand and broad oversupply offset worries about supply disruption from conflict in the Middle East and war in Ukraine.
Brent crude futures fell 49c, or 0.74%, to $65.88 a barrel by 4.19am GMT, and US West Texas Intermediate crude fell 51c, or 0.82%, to $61.86.
“The [US] inflation battle doesn’t quite look won, which dampens the demand outlook for oil from the world’s largest economy. Even geopolitical unrest is failing to support oil prices, as fundamentals point to an oversupply and lacklustre demand,” said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.
Government reports on Thursday showed US consumer prices in August increased by the most in seven months and a surge in first-time applications for unemployment aid last week, keeping expectations high that the Federal Reserve will cut interest rates next week to try to boost economic growth, which would in turn drive up demand for oil.
Oil prices gained as much as 2% this week on the potential for disruptions to output or trade flows from conflict and war, but the benchmarks started tumbling on Thursday and have since wiped out the week's earlier gains.
The losses began after the International Energy Agency said in its monthly report world oil supply would rise more rapidly than expected this year due to planned output increases by oil cartel Opec and allies like Russia, a grouping known as Opec+.
Opec, in its own report, made no change to its relatively high global oil demand growth forecasts for 2025 and 2026, saying the world economy was maintaining a solid growth trend.
The crude market kept toggling between surplus supply pressures and concerns about short-term disruptions, but the geopolitical worries were providing diminishing support to prices, SDIC Futures said in a daily report.
Opec+ decided on Sunday to further raise its oil output quotas from October as the group’s leader, Saudi Arabia, pushes to regain market share.
Saudi Arabia’s crude oil exports to China are set to surge, several trade sources told Reuters on Thursday, with state-controlled energy firm Aramco shipping about 1.65-million barrels a day that way in October, up sharply from 1.43-million barrels a day allocated in September.
In Russia, the world’s second-biggest producer of crude behind the US in 2024, revenue from crude and oil products sales declined in August to one of the lowest levels seen since the start of the conflict in Ukraine, the IEA said.
An Energy Information Administration report on Wednesday said US crude stocks rose last week by 3.9-million barrels to 424.6-million barrels.
Reuters
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