Oil prices edged higher on Friday after four consecutive sessions of declines but remained on course for their sharpest weekly plunge since late June, as expectations of increased OPEC+ output weighed on the market.
Brent crude futures gained 18 cents, or 0.3%, to trade at $64.29 a barrel by 0000 GMT, while U.S. West Texas Intermediate (WTI) rose 19 cents, or 0.3%, to $60.67. Despite the modest rebound, Brent is still heading for a weekly loss of 8.3% and WTI is down 7.6%. If prices fail to recover further, Brent could close at its lowest since late May, while WTI is set to finish near levels last seen on May 2.
Market sentiment remains under pressure as sources told Reuters that OPEC+ could agree to raise oil production by as much as 500,000 barrels per day (bpd) in November, tripling October’s increase. Saudi Arabia is reportedly pushing to reclaim market share, a move analysts say could deepen the downturn.
“If OPEC+ do go ahead and announce a 500,000 bpd increase this weekend, it’s likely a big enough increase to send crude oil lower again, initially to support at $58.00, before a test of this year’s lows around $55.00,” said Tony Sycamore, analyst at IG.
Adding to the bearish outlook are seasonal factors, refinery maintenance slowdowns, and rising stockpiles. Data from the U.S. Energy Information Administration (EIA) on Wednesday showed that U.S. crude oil, gasoline, and distillate inventories all rose last week, reflecting weakening demand.
Concerns about a potential U.S. government shutdown and the resumption of Iraq’s Kurdish oil exports have also added downward pressure. Meanwhile, the Group of Seven (G7) finance ministers pledged to intensify efforts to limit Russia’s oil revenues by targeting buyers and facilitators circumventing sanctions.
With oversupply fears mounting and global demand softening, analysts warn that oil prices may face further declines in the weeks ahead unless market fundamentals shift.