Oil prices inched higher on Friday after three straight sessions of losses, as traders weighed signs of oversupply and weakening U.S. demand. Despite the modest rebound, both major benchmarks remain on track for a second consecutive weekly decline.
Brent crude futures rose 28 cents, or 0.44%, to $63.66 a barrel at 04:21 GMT, while U.S. West Texas Intermediate (WTI) gained 29 cents, or 0.49%, to $59.72. Both contracts are set to finish the week about 2% lower, pressured by rising global output and swelling inventories.
The surprise 5.2 million-barrel build in U.S. crude stocks last week reignited concerns of an oversupplied market.
“The price drop is driven by the unexpected inventory increase, amplified by risk-aversion flows, a stronger dollar, and the ongoing U.S. government shutdown,” said Tony Sycamore, analyst at IG Markets.
Data from the Energy Information Administration (EIA) showed U.S. crude inventories rose more than forecast due to higher imports and lower refinery runs, though gasoline and distillate inventories declined.
The prolonged U.S. government shutdown, the longest in history, has also added to economic uncertainty. Flight reductions at major airports and weaker private labor reports for October have raised concerns about slowing fuel demand.
Meanwhile, the OPEC+ alliance decided on Sunday to slightly increase output in December, but paused further hikes for the first quarter of 2026 to avoid tipping the market into a glut. Following the move, Saudi Arabia cut its December crude prices for Asian buyers, citing abundant supply.
Sanctions on Russia and Iran continue to complicate global flows, particularly for large importers such as China and India, offering limited price support.
In a geopolitical twist, Swiss commodity trader Gunvor withdrew its proposal to purchase Lukoil’s foreign assets after the U.S. Treasury labeled the Russian firm a “puppet,” signaling continued pressure on Moscow’s energy sector.
“Gunvor scrapping its Lukoil assets purchase shows the U.S. remains firm on sanctions enforcement,” said Vandana Hari, founder of Vanda Insights. “The support is fragile — the oversupply narrative will likely creep back as the dominant theme.”
Despite global headwinds, China’s crude imports in October rose 2.3% from September and 8.2% year-on-year to 48.36 million tons, reflecting strong refinery runs and steady demand in the world’s largest oil consumer.
