Oil prices edged lower on Friday, on track for a third consecutive monthly decline, as a stronger dollar and weak Chinese economic data limited gains. Rising output from major producers also helped offset the impact of Western sanctions on Russian exports.
As of 5:06 GMT, Brent crude futures fell 40 cents, or 0.62 percent, to $64.60 a barrel, while U.S. West Texas Intermediate (WTI) crude slipped 42 cents, or 0.69 percent, to $60.15 a barrel.
Brent and WTI on track to lose 3 percent in October
A stronger U.S. dollar dampened investor appetite across the commodities market, after Fed Chair Jerome Powell said on Wednesday that another rate cut in December was not assured. The U.S. dollar index had risen 0.56 percent in the past week.
Oil prices also weakened following an official survey showing that China’s factory activity contracted for a seventh consecutive month in October.
Both Brent and WTI are on track to lose around 3 percent in October, as rising output is expected to outpace demand growth this year. The Organization of the Petroleum Exporting Countries (OPEC) and major non-OPEC producers have been increasing production to capture greater market share.
The additional supply is also expected to help offset the impact of Western sanctions that have disrupted Russian oil exports to key buyers such as China and India.
OPEC+ expected to raise output for December
Sources have revealed that OPEC+ is leaning toward a modest production increase for December ahead of the group’s meeting on Sunday. The eight OPEC+ members have collectively raised output targets by more than 2.7 million barrels per day—around 2.5 percent of global supply—through a series of monthly hikes.
This figure represents just under half of the 5.85 million barrels per day in cumulative output cuts the alliance had implemented in previous years.
A report from the U.S. Energy Information Administration (EIA) also revealed that U.S. crude production hit a record 13.6 million barrels per day last week.
This week, worries about oversupply and sluggish demand continued to weigh on oil prices despite an EIA report revealing that U.S. crude stockpiles fell by 6.86 million barrels to 416 million barrels in the week ending October 24, far exceeding analysts’ forecasts for a modest 211,000-barrel decline.
U.S. President Donald Trump said on Thursday that China had agreed to start purchasing U.S. energy, noting that a large-scale deal could involve buying oil and gas from Alaska. However, analysts remained skeptical that the U.S.-China trade agreement would significantly increase China’s demand for American energy.