Oil prices fall with expected low demand, upcoming supply boost

Reuters :

Oil prices fell on Friday as traders looked toward weaker demand in the US, the world’s largest oil market, and a boost in supply this autumn from OPEC and its allies.

Brent crude futures for October delivery, which expired on Friday, settled at $68.12 a barrel, down 50 cents, or 0.73 per cent. The more active contract for November finished down 53 cents, or 0.78 per cent, at $67.45, according to Reuters.

West Texas Intermediate crude futures settled at $64.01, down 59 cents, or 0.91 per cent.

The market was in part shifting its focus toward next week’s OPEC+ meeting, said Tamas Varga, analyst at PVM Oil Associates.

Crude output has increased from the Organisation of the Petroleum Exporting Countries and its allies, known as OPEC+, as the group has accelerated output hikes to regain market share, raising the supply outlook and weighing on global oil prices.

“Overall, the bottom line is we’re going to see a jump in supply feeding into a lackluster demand market,” said Andrew Lipow, president of Lipow Oil Associates.

The US summer driving season ends on Monday’s Labor Day holiday, signalling the end of the highest demand period in the United States, which is the largest fuel market.

“The market is beginning to wonder what effect the tariffs might have on the economic outlook next year,” Lipow said, referring to tariffs imposed by the administration of President Donald Trump on US imports from many trading partners.

Crude supply increases have not made their way into the US market yet, raising the possibility supply and demand will be in a tighter balance, said Phil Flynn, senior analyst with Price Futures Group.