Oil prices fell on Friday as traders anticipated weaker demand from the United States, the world’s largest fuel market, and a scheduled boost in supply from the OPEC+ alliance this autumn. The more active November contract for Brent crude settled at $67.45 a barrel, down 0.78%, while West Texas Intermediate (WTI) crude futures declined 0.91% to close at $64.01. The market’s focus is shifting toward next week’s OPEC+ meeting, where the group’s production policy will be closely watched.
The decline is largely driven by a bearish outlook for supply and demand. OPEC+ has been accelerating output hikes to regain market share, increasing the global supply outlook. This comes just as the US summer driving season, a period of peak demand, concludes with the Labor Day holiday. Analyst Andrew Lipow summarized the sentiment, stating, “we’re going to see a jump in supply feeding into a lackluster demand market.”
Despite the overall pessimistic tone, some analysts pointed to factors that could indicate a tighter market. Phil Flynn noted that increased OPEC supply has not yet reached the US market, and draws from US crude inventories were higher than expected, suggesting late-summer demand remains firm. Earlier price support from geopolitical tensions, such as Ukrainian attacks on Russian export terminals, was tempered by reports of potential ceasefire talks.
Adding a layer of uncertainty are broader economic concerns and international trade dynamics. The market is assessing the potential impact of US tariffs on the economic outlook. Furthermore, traders are monitoring whether India will bow to US pressure to stop buying heavily discounted Russian oil. However, the prevalent view is that India will defy these threats, with Russian oil exports to the country expected to rise in September, undermining the effectiveness of sanctions.
