Oil prices extended declines during Friday's Asian session as concerns about global oversupply and weakening United States demand overshadowed fears of supply disruptions from conflicts in the Middle East and the war in Ukraine.
By 2:55 pm AEST (4:55 am GMT), Brent crude futures were down 51 cents, or 0.8%, to US$65.86 per barrel, while U.S. West Texas Intermediate (WTI) crude slipped 53 cents, or 0.9%, to $61.84.
Earlier in the week, prices had climbed as much as 2% on worries about potential supply interruptions from geopolitical flashpoints. However, the rally reversed on Thursday, with benchmarks wiping out their weekly gains.
The downturn followed the International Energy Agency’s (IEA) monthly report, which projected global oil supply would rise faster than anticipated this year, driven by planned output increases from the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+.
OPEC, in its own assessment, left its global oil demand growth forecasts for 2025 and 2026 unchanged, pointing to what it called a “solid growth trend” in the world economy.
Adding to the pressure, U.S. government data on Thursday showed consumer prices in August rose at the fastest pace in seven months, while first-time unemployment claims surged.
The figures bolstered expectations that the Federal Reserve may cut interest rates next week to stimulate economic growth, which in turn could eventually boost fuel consumption.
Separately, a U.S. Energy Information Administration report released on Wednesday showed domestic crude inventories rose by 3.9 million barrels last week, bringing total stocks to 424.6 million barrels, further fuelling oversupply concerns.
