Oil prices fell sharply in oil market this week as expectations of higher OPEC+ production fueled concerns about oversupply. Brent crude closed at $64.53 per barrel, rising slightly by 42 cents. However, it still posted an 8.1% weekly decline — its steepest in over three months. U.S. West Texas Intermediate (WTI) also gained 40 cents to settle at $60.88 but ended the week down 7.4%.
Traders linked the decline to reports that OPEC+ may boost oil output soon. Iraq’s pipeline from the Kurdistan Region to Turkey also resumed operations after more than two years, adding to market supply. “The expected increase in OPEC+ production and the Kurdistan pipeline restart are keeping sellers active,” said Dennis Kissler of BOK Financial.
At the same time, U.S. inventory data pointed to weaker demand. The Energy Information Administration reported a rise in crude, gasoline, and distillate stocks, while refining activity declined. Analysts said these factors reinforced a bearish outlook for crude prices in the near term.
Meanwhile, eight OPEC+ countries are reportedly backing a production hike. Saudi Arabia supports a major increase to regain market share, while Russia favors a smaller rise. Analysts warned that combined with lower refinery runs and seasonal demand drops, these moves could weigh on global prices.
Rystad Energy’s Janiv Shah noted that demand in the Atlantic Basin had slightly fallen as summer travel ended. JPMorgan analysts added that the oil market could move into a notable surplus in the fourth quarter and early next year.
Elsewhere, a major fire broke out at Chevron’s El Segundo refinery in California late Friday, sending thick smoke into the air and prompting a rapid emergency response. The refinery, one of the largest on the U.S. West Coast, processes hundreds of thousands of barrels of crude daily and plays a key role in supplying fuel to Southern California.
Overall, global oil markets continue to face significant pressure from rising production, slowing demand, and uncertain economic conditions. OPEC’s plan to increase supply, combined with weaker consumption in major economies, threatens to deepen an existing imbalance between supply and demand. Additionally, the restart of Iraq’s northern pipeline and higher Russian output are adding to the sense of oversupply.