Oil Prices Extend Losses Amid Oversupply and Weak U.S. Demand

Crude benchmarks continued their downward trend on Friday, extending the sharp losses recorded in the previous session. The market remains under pressure from oversupply concerns and muted demand in the United States, even as geopolitical risks persist in the Middle East and Ukraine.

As of 07:03 GMT, Brent crude was trading at $65.82 per barrel, down 55 cents (0.83%), while West Texas Intermediate (WTI) slipped 57 cents (0.91%) to $61.80 per barrel.

Commenting on the market outlook, Priyanka Sachdeva, Senior Market Analyst at Phillip Nova, noted: “The U.S. inflation battle does not appear to be over, which weakens the demand outlook for oil. Even with geopolitical unrest, the underlying fundamentals of oversupply and subdued demand continue to dominate.”

Latest government data added to the cautious sentiment. U.S. consumer prices in August recorded their sharpest rise in seven months, while jobless claims increased significantly, signaling potential headwinds for the economy. These developments strengthened expectations that the Federal Reserve could announce an interest rate cut in the coming week to stimulate growth—potentially providing some support for energy demand.

Despite a brief rally earlier in the week, when oil prices gained nearly 2% on fears of possible supply disruptions, those gains have been erased. The market has shifted focus back to fundamentals, with traders weighing abundant supply against lackluster consumption prospects.

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