Crude oil prices slumped Friday, extending weekly losses as traders weighed easing geopolitical risks against renewed fears of slowing demand and rising inventories. West Texas Intermediate (WTI) fell 4.24% to $58.90 per barrel, while Brent crude dropped 3.82% to $62.73, marking their lowest levels in nearly three months.
The selloff followed signs of progress toward a ceasefire between Israel and Hamas, which helped cool Middle East tensions that had propped up prices earlier in the week. However, the relief rally was short-lived after U.S. President Donald Trump threatened to impose sweeping new tariffs on Chinese goods, reviving concerns about global growth and energy consumption.
"Oil's risk premium from geopolitical fears has all but evaporated, and now markets are left staring at weak demand signals," said one analyst cited by Reuters. "Add to that a heavier U.S. supply picture, and the downside bias becomes hard to ignore."
Fresh data from the Energy Information Administration (EIA) showed U.S. crude inventories rose by 3.7 million barrels for the week ending Oct. 3, nearly double market expectations of a 2.2-million-barrel increase. The build reinforced fears that supply continues to outpace consumption as refineries enter seasonal maintenance.
Production also climbed to around 13.6 million barrels per day, while inventories at the Cushing, Oklahoma hub — the key delivery point for WTI futures — fell modestly by 763,000 barrels, offering limited support.
Meanwhile, U.S. oil rig counts slipped by four to 418, the first decline in six weeks, according to Baker Hughes. While the drop suggests some restraint among shale producers, output remains near record highs.
On the policy front, OPEC+ confirmed plans to raise output by 137,000 barrels per day in November, maintaining its cautious, step-by-step approach to production adjustments. The alliance has so far resisted calls for deeper cuts, opting instead to manage supply through incremental changes aimed at stabilizing prices.
However, the EIA's latest outlook warned that rising U.S. and non-OPEC production could overwhelm OPEC+'s efforts. The agency forecasts Brent to average $62 per barrel in the fourth quarter of 2025, before trending lower toward $52 in 2026 if inventories continue to build.
Analysts expect crude prices to remain volatile in the near term as traders balance easing geopolitical risks against growing evidence of oversupply. Any deterioration in global manufacturing or renewed escalation in trade tensions could amplify the downside momentum.
For now, traders are watching the next round of EIA and API inventory data, China's industrial activity numbers, and any fresh OPEC+ commentary for clearer direction.
IBT's Oil Market Watch will continue tracking daily WTI and Brent movements, U.S. inventory trends, OPEC+ policy shifts, and global demand indicators shaping the energy market.
