Oil Prices Set For First Weekly Decline In Three Weeks As Supply Concerns Mount
Analysts at ANZ Research noted that oil remained under pressure due to expectations of additional barrels hitting the market from the OPEC+ alliance.
Oil markets continued to slip on Friday, marking a third straight session of losses and putting crude on course for its first weekly decline in three weeks. Traders weighed the prospect of rising supply and a surprise build in US crude inventories, fuelling worries over weakening demand.
By 10 AM, Brent crude futures eased 10 cents, or 0.15 per cent, to $66.89 a barrel. US West Texas Intermediate (WTI) crude was trading lower by 13 cents, or 0.20 per cent, at $63.35, reported Reuters. On a weekly basis, Brent has fallen 1.78 per cent while WTI has shed 1 per cent.
OPEC+ Supply Fears Drive Market Pressure
Analysts at ANZ Research noted that oil remained under pressure due to expectations of additional barrels hitting the market from the OPEC+ alliance. Market sentiment has been shaped by speculation that the group could increase output in October, seeking to claw back market share lost to US shale producers in recent years.
Eight members of OPEC, along with allies such as Russia, are set to deliberate on further production increases at a meeting on Sunday. Any decision to ease restrictions could effectively bring forward the unwinding of 1.65 million barrels per day of supply curbs – roughly 1.6 per cent of global demand – more than a year earlier than initially planned.
US Inventory Build Adds to Weakness
Adding to bearish sentiment, US government data revealed an unexpected increase in crude stockpiles. According to the Energy Information Administration, inventories rose by 2.4 million barrels last week as refineries moved into seasonal maintenance. This contrasted with a Reuters poll that had forecast a drawdown of 2 million barrels.
BMI analysts said refining margins, which have supported prices in recent months, are likely to be squeezed as global demand growth slows and maintenance schedules reduce throughput. “This will lower the call on crude in the near term,” the report observed.
Geopolitical Risks Remain a Wild Card
Despite the bearish fundamentals, supply-side risks continue to hang over the market. US President Donald Trump told European leaders on Thursday that they must cease purchasing Russian crude, raising the possibility of disruptions to one of the world’s major energy suppliers. Any such move could propel prices higher, underscoring the volatility in oil markets.
With OPEC+ set to meet in the coming days and geopolitical tensions persisting, traders remain cautious. The coming week may prove pivotal in determining whether oil prices stabilise or extend their downward momentum.
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