Oil prices experienced a slight decline on Friday, following significant drops in the previous session. This movement was driven by concerns regarding a potential weakening of U.S. demand and a general oversupply, which overshadowed apprehensions about supply disruptions stemming from conflicts in the Middle East and the ongoing war in Ukraine. Brent crude futures declined by 30 cents, representing a 0.45% decrease, settling at $66.07 a barrel as of 0114 GMT. Meanwhile, U.S. West Texas Intermediate crude experienced a drop of 31 cents, or 0.5%, reaching $62.06.

The benchmarks experienced declines of 1.7% and 2%, respectively, during the most recent trading session. The losses on Thursday were reported, indicated that global oil supply is set to increase more swiftly than previously anticipated this year, driven by planned output enhancements from the Organization of the Petroleum Exporting Countries and its allies, including Russia, collectively referred to as OPEC+. OPEC, in its own report, maintained its relatively high global oil demand growth forecasts for 2025 and 2026, indicating that the world economy continues to exhibit a solid growth trend. OPEC+ reached a decision on Sunday to increase its oil output quotas starting in October, as Saudi Arabia, the group’s leader, seeks to reclaim market share. Saudi Arabia’s crude oil exports to China are poised for a significant increase.

The state-controlled energy company Aramco is expected to ship approximately 1.65 million barrels per day to China in October, a notable rise from the 1.43 million barrels per day allocated in September. The market is scrutinizing the sustainability of China’s capacity to absorb barrels while maintaining low inventories within the Organization for Economic Co-operation and Development, according to Giovanni Staunovo, an analyst at UBS. He noted that investors are also attentive to potential additional sanctions impacting Russian oil. In Russia, the second-largest producer of crude oil globally, trailing only the U.S. in 2024, revenue from the sales of crude and oil products experienced a decline in August, reaching one of the lowest levels observed since the onset of the conflict in Ukraine, according to the IEA. Russia intends to reduce ESPO Blend oil loadings from its Far East Kozmino port in September to 4 million metric tons (approximately one million barrels per day) from 4.2 million tons in August.

In August, U.S. consumer prices experienced their largest increase in seven months. Concurrently, a rise in first-time applications for unemployment aid last week has sustained expectations that the Federal Reserve may lower interest rates in the upcoming week, potentially stimulating economic growth and enhancing demand for oil. U.S. crude stocks increased by 3.9 million barrels last week, reaching a total of 424.6 million barrels.