Global Oil Prices Slip Nearly 1% Amid Oversupply, Weak US Demand Signals

LONDON: Crude oil prices retreated on Thursday, weighed down by oversupply concerns and weakening demand in the United States, despite geopolitical risks stemming from the Middle East and the Ukraine conflict.

Brent crude futures dropped 63 cents, or 0.9%, to $66.86 a barrel by 1139 GMT, while US West Texas Intermediate (WTI) crude slid 68 cents, or 1.1%, to $62.99.

Prices had gained over $1 in the previous session after Israel’s strike on Hamas leadership in Qatar and heightened NATO air defence activity near Poland’s border.

However, the International Energy Agency (IEA) noted in its monthly outlook that global oil supply is expanding faster than anticipated, driven by OPEC+ production hikes and non-OPEC growth, while demand remains muted.

Analysts said the market is caught between supply fears due to geopolitical tensions and actual oversupply reflected in OPEC+ output and swelling US inventories. The Energy Information Administration (EIA) reported US crude stocks rose by 3.9 million barrels last week, against expectations of a 1-million-barrel draw.

Expectations of a US economic slowdown and possible Federal Reserve rate cuts next week further pressured sentiment.

Meanwhile, Saudi Arabia’s exports to China are set to rise sharply in October after price cuts, with Aramco shipping about 1.65 million barrels per day compared with 1.43 million in September, traders told Reuters.