Oil prices decline for the third consecutive session heading towards the first weekly loss
Global oil markets witnessed a decline for the third consecutive session on Friday, September 5, heading towards recording the first weekly loss in three weeks, amid rising fears of a global supply glut.
Unexpected American data showed an unexpected increase in crude inventories, which intensified selling pressures. By 04:20 GMT, Brent crude fell by 0.15% to $66.89 per barrel, while West Texas Intermediate crude declined by 0.20% to $63.35. In terms of weekly performance, Brent lost 1.78% of its value, while U.S. crude lost about 1%.
On the supply side, expectations of increased supplies from the "OPEC+" alliance remain a pressure factor on prices. In this regard, analysts at ANZ confirmed that "market pressures continue due to expectations of increased supplies from the OPEC+ alliance."
These expectations are reinforced by news that eight members of the alliance, which includes OPEC and Russia, will discuss next Sunday raising production for October. This step "means the beginning of the cancellation of part of the additional supply cut of 1.65 million barrels per day, equivalent to 1.6% of global demand, more than a year ahead of the scheduled date."
On the American side, crude inventories unexpectedly increased by 2.4 million barrels last week, according to data from the Energy Information Administration, while analysts had expected a draw of two million barrels. This unexpected rise reflects "weak demand as refineries enter the maintenance season."
A report by BMI indicated that support for oil prices in recent months has been driven by the strength of the refining sector, but warned that "margins are likely to shrink soon as global demand growth slows and refinery consumption of crude declines."
Despite these negative factors, geopolitical risks remain a supporting factor preventing prices from collapsing. A White House official revealed that U.S. President Donald Trump "stressed to European leaders the need to stop purchasing Russian oil," which, if implemented, could lead to a decline in global supplies and push prices up again.
