Onome Amuge
Oil prices fell to their lowest level in four months on Thursday, extending a week-long losing streak, as concerns over mounting oversupply overshadowed geopolitical risks and signs of Chinese stockpiling.
Brent crude, the international benchmark, slipped 1.9 per cent to $64.11 a barrel, its weakest close since June 2, while US marker West Texas Intermediate lost 2.1 per cent to $60.48, the lowest since May 30. Both contracts have now fallen for four consecutive sessions.
The declines come ahead of a closely watched OPEC+ meeting this weekend, where the producers’ alliance could decide to accelerate its supply increases. Three people familiar with the talks said Saudi Arabia is pushing the group to raise output by as much as 500,000 barrels per day in November ,three times the October increment, as it seeks to reclaim market share in the face of softer demand.
Analysts warn the move could tip the market into a period of surplus. JPMorgan said in a note on Thursday that September marked a turning point for oil, with inventories set to swell through the final quarter of 2025 and into 2026. “Potentially higher OPEC+ supply, slowing global refinery runs due to maintenance, and a seasonal dip in demand are set to accelerate stock builds,” the bank wrote.
HFI Research, an investment consultancy, echoed those concerns, saying in a blog post that US and global oil inventories were likely to climb into year-end. “Couple that with higher OPEC+ exports, and the end result is a persistently weaker oil market environment,” it said.
Data this week from the US Energy Information Administration reinforced those worries. Government figures showed crude, gasoline and distillate stocks all rising as refinery activity slowed and demand softened. Analysts at PVM Energy said oversupply fears were “compounded by signs of weak demand”, noting that average forecasts for 2025 oil consumption had been revised down by 150,000 barrels per day since January.
Geopolitics offered only limited support. The Group of Seven nations pledged fresh measures to tighten enforcement of their Russian oil price cap, while US officials confirmed Washington will provide Ukraine with intelligence to target Russian energy infrastructure with long-range missiles. “There is some concern in the market again that Russian oil could get disrupted,” said Giovanni Staunovo, a commodity analyst at UBS. “But as long as there are no disruptions yet, the impact on prices will likely be minor.”
Chinese crude stockpiling, meanwhile, provided a floor for prices, traders said, as the world’s biggest importer moved to build reserves at cheaper levels. In the US, the Colonial Pipeline, the country’s largest fuel conduit, restarted after an unplanned outage, averting potential supply disruptions to the east coast.
The combination of excess supply and weaker consumption has left OPEC+ facing a dilemma. Raising output could further depress prices at a time when global demand is faltering. But holding back barrels risks ceding market share to rivals, particularly US shale producers, whose exports have risen sharply in recent months.
Markets are now braced for the weekend’s OPEC+ meeting to set the tone for oil into year-end. Traders will be watching whether Saudi Arabia can persuade fellow members to agree to a more aggressive output rise, and whether that risks deepening the price slide already under way.
