Oil prices edged lower on Friday after big falls in the last session over concerns about possible softening of U.S. demand and broad oversupply that offset worry about supply disruption from conflict in the Middle East and war in Ukraine.
Brent crude futures fell 30 cents, or 0.45%, to $66.07 a barrel by 0114 GMT, while U.S. West Texas Intermediate crude fell 31 cents, or 0.5%, to $62.06.
The benchmarks lost 1.7% and 2%, respectively, in the last trading session.
The losses on Thursday came as the International Energy Agency said in its monthly report that world oil supply would rise more rapidly than expected this year due to planned output increases by the Organization of the Petroleum Exporting Countries 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.
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 per day that way in October, up sharply from 1.43 million bpd allocated in September.
The market is questioning how long China can continue to absorb barrels and keep Organization for Economic Co-operation and Development (OECD) inventories low, said Giovanni Staunovo, an analyst at UBS, adding that investors were also watching for further sanctions affecting Russian oil.
In Russia, the world’s second-biggest producer of crude behind the U.S. 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.
Reuters also reported that Russia plans to drop ESPO Blend oil loadings from its Far East Kozmino port in September to 4 million metric tons (about one million barrels per day) from 4.2 million tons in August, two sources familiar with the plan said.
U.S. consumer prices in August increased by the most in seven months, and a surge in first-time applications for unemployment aid last week kept expectations high that the Federal Reserve will cut interest rates next week, which could boost economic growth and demand for oil.
An Energy Information Administration report on Wednesday said U.S. crude stocks rose last week by 3.9 million barrels to 424.6 million barrels.
Source: Reuters