Oil prices are on track to log their steepest weekly decline in more than three months as markets grow increasingly nervous about a surge in crude supply and weakening demand dynamics. Concerns over a potential OPEC+ production increase, coupled with inventory builds and seasonal demand softness, have pushed benchmark crude benchmarks sharply lower.
By midday Friday, Brent crude futures traded around USD 64.50 a barrel, while U.S. West Texas Intermediate (WTI) hovered near USD 60.90—both modestly up on the session. But despite the uptick, both contracts remain down significantly for the week: Brent is off about 8 %, while WTI has lost near 7.4 % over the past five sessions. Reuters
Supply Overhang: The Core Pressure
The dominant factor weighing on prices is the growing expectation that OPEC+ will boost output significantly in November — perhaps by as much as 500,000 barrels per day, triple the October increase. Reuters+2Reuters+2 Such a move would signal a more aggressive posture by Saudi Arabia and other producers seeking to reclaim or defend market share.
Already in September, OPEC’s oil production rose to around 28.40 million barrels per day, an increase of 330,000 bpd versus August. Reuters Survey data suggests that most of the increase came from the UAE and Saudi Arabia, and part of it stems from an accelerated unwind of prior voluntary cuts. Reuters+1 That expansion threatens to flood markets just as demand growth loses steam.
Mounting Inventory & Weakening Demand
Beyond production risks, other structural headwinds are compounding the downward momentum:
- U.S. crude, gasoline and distillate inventories have shown fresh builds, reflecting soft refining activity and sluggish consumption. Reuters+2Reuters+2
- A seasonal drop in demand heading into the tail end of the year is now a recurring expectation among analysts. Reuters+2Reuters+2
- Refinery maintenance in key producing regions is curbing throughput further, reducing the pace at which crude is processed into refined products. Reuters+1
- A delayed or partial U.S. government shutdown has added uncertainty to macroeconomic growth and energy demand forecasts. Reuters+2Reuters+2
Taken together, these dynamics are pushing analysts to revise down their outlooks. JPMorgan, for example, now believes September may mark an inflection point, with the oil market flowing toward a meaningful supply surplus in Q4 2025 and into 2026. Reuters+1
