Oil prices fall on OPEC+ output plans

Global oil prices remain under pressure despite a minor rebound, as markets brace for renewed oversupply amid signs of weak demand and persistent economic uncertainty.

Brent crude climbed slightly to USD64.40 per barrel on Friday, but the benchmark remains close to a four-month low and is on track for its worst weekly performance since June.

The modest gain has done little to lift market sentiment, with traders increasingly worried that fresh output increases by major producers could worsen an already fragile balance between supply and demand.

According to market sources, the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) are considering an additional production hike in November. This could add up to 500,000 barrels per day, which is triple the increase approved in October.

Reports suggest Saudi Arabia is backing the move as part of efforts to reclaim lost market share after months of voluntary output restraint. However, analysts warn that the timing could be risky.

“Adding more barrels at a time when demand is already soft could push prices down even further,” said one industry analyst, noting that global consumption growth has slowed amid weaker economic indicators in major markets.

Reinforcing those worries, the US Energy Information Administration (EIA) reported a rise in crude, petrol, and distillate inventories last week. Refinery runs also declined, while domestic fuel demand weakened.

All signs point to an oversupplied market. Additional barrels from OPEC+ could therefore deepen the glut and make it harder for producers to maintain price stability.

The bearish sentiment is also being driven by broader macroeconomic concerns. Fears of a potential US government shutdown are weighing on demand expectations, while the resumption of Kurdish oil exports from Iraq is bringing additional supply back to global markets.

Meanwhile, geopolitical developments are adding another layer of uncertainty. Finance ministers from the G7 nations have pledged to intensify enforcement of the price cap on Russian oil.

They vow to target intermediaries and countries expanding their purchases of Moscow’s crude. The renewed push is aimed at curbing Russia’s energy revenues amid its ongoing war in Ukraine.

Overall, traders say the market faces a difficult few weeks ahead as supply continues to outpace demand. This leaves oil prices vulnerable to further declines unless OPEC+ reassesses its output strategy.