Oil prices fell in Asian trade on Friday amid persistent concerns over sluggish demand and rising global supplies, although they were still headed for mild weekly gains.
Oil took some support from heightened geopolitical tensions in Russia-Ukraine and the Middle East this week, while the prospect of more U.S. sanctions against Moscow also helped.
But this was largely offset by weak U.S. economic data sparking concerns over slowing demand, while a bearish report from the International Energy Agency also weighed.
Brent oil futures for November fell 0.5% to $66.03 a barrel, while West Texas Intermediate crude futures fell 0.6% to $61.74 a barrel by 21:35 ET (01:35 GMT). Both contracts were up between 0.5% and 1% for this week.
Oil slides as IEA report spurs oversupply concerns
Oil fell nearly 2% on Thursday after the IEA said in a monthly report that global oil production was likely to rise more than expected this year, amid output increases by key producer groups such as the Organization of Petroleum Exporting Countries and allies (OPEC+).
The IEA sees supply rising by 2.7 million barrels per day in 2025, up from prior forecasts of 2.5 million bpd, and by an additional 2.1 million bpd in 2026.
The OPEC also released a monthly report this week, but made no change to its relatively higher forecasts for global oil demand growth in 2025 and 2026, stating that the global economy was growing steadily.
The cartel sees demand rising by 1.29 million bpd in 2025, almost twice the rate forecast by the IEA.
The OPEC+ had on Sunday agreed to hike production by a substantially smaller margin than markets were fearing- a move that spurred some strength in oil.
But this was largely offset by growing concerns over slowing fuel demand, especially following weak data on American oil inventories. Additionally, U.S. consumer price index inflation data showed an increase in price pressures– a move that could herald more pressure on the world’s biggest fuel consumer.
Still, the CPI data fueled bets that the Federal Reserve will cut interest rates next week. The dollar weakened on this notion, offering oil prices some support.
US seeks harsher tariffs on Russian oil buyers
Oil took support from a host of reports this week that showed the U.S. seeking harsher penalties for major buyers of Russian oil, specifically India and China.
The U.S. is seeking to pressure G7 countries to hit China and India with sharply higher tariffs for buying Russian oil, the Financial Times reported on Thursday.
Both countries already face about 50% U.S. tariffs, but have signaled little intent to wind down their oil buying from Moscow.
The U.S. is calling for 100% tariffs, and was earlier seen asking the European Union to ramp up its tariffs on China and India.
A disruptions to Chinese and Indian oil supplies could tighten global oil supplies, given that the two are among the world’s biggest crude importers.
Source :
https://www.investing.com/news/commodities-news/oil-prices-dip-on-fears-of-slowing-demand-oversupply-4236336
