Oil prices post biggest weekly decline in three months ahead of Opec meeting

Oil prices settled higher on Friday but posted a weekly loss of 8.1 per cent over expectations that Opec+ will raise output, adding to a glut in crude supplies.

Brent, the benchmark for two thirds of the world's oil, closed up 0.7 per cent at $64.53 a barrel. West Texas Intermediate, the gauge that tracks US crude, was up 0.7 per cent at $60.88.

For the week, Brent fell 8.1 per cent, the largest weekly loss in over three months. WTI tumbled 7.4 per cent in the week.

The rebound in crude came after prices steadily dropped this week through to Thursday, which put Brent and WTI on pace to slide 6.5 per cent and 7.1 per cent, respectively, their biggest weekly losses since June.

That also widened losses for 2025 overall, with Brent now down 13.3 per cent and WTI giving up 15 per cent for the year to date.

The sentiment in the oil market took a sharply bearish turn this week amid reports that Opec+, the group of oil producers led by Saudi Arabia and Russia, is preparing to boost output for next month at its meeting on Sunday, after increasing production for seven consecutive months since April this year.

Opec+'s move to increase output "will bring more idled supply back to the market, fuelling oversupply concerns", said Soojin Kim, a Dubai-based research analyst at MUFG.

"Early signs of excess supply are already visible in the Middle East ... market focus will be on Opec+’s decision, the pace of returning barrels, and global demand resilience as surplus risks build," she added.

This week, Goldman Sachs predicted that Opec+ will raise oil production by 140,000 barrels per day for November amid lower crude stocks in the US, higher demand in Asia and downside risks to Russia’s crude production after Ukrainian attacks on Russian refineries.

Last month, Opec+, citing steady global economic outlook and current healthy market fundamentals, approved adding about 137,000 bpd to the market for October as it began to unwind 1.65 million bpd of voluntary cuts announced in April 2023.

This came after the group eliminated about 2.2 million barrels of voluntary cuts announced in November 2023 the month before, with monthly cuts starting in April.

"Crude futures were marginally higher [early on] Friday morning in the Middle East amid tepid bargain-hunting buying, after sliding for the fourth session in a row to three-month lows," analysts at Vanda Insights said.

However, "prices may go into a holding pattern through the rest of the day, awaiting the result of the Opec+ meeting on Sunday".

Fears of an oversupply of oil in the market are “exaggerated”, Vandana Hari, chief executive of Singapore-based Vanda Insights, told The National this week. The market is not “seeing the glut and it’s not evident yet in the physical market … it’s exaggerated”, she said.

Also, higher supply from Opec+, combined with a seasonal decline in US oil demand, could raise stockpiles in the US, the world's biggest consumer of crude.

The US Energy Information Administration on Wednesday said inventories climbed last week on tepid demand and refining activity.

US President Donald Trump’s pressure on countries to stop buying Russian crude in an effort to curtail Moscow’s revenue and spending on the Ukraine war is also affecting oil prices.

Oil's drop this week also came after prices last week posted their biggest weekly gains since June on Mr Trump's pressure and Ukraine's latest attacks on Moscow's energy infrastructure.