KEY POINTS
- Crude prices dropped due to expectations of slowing US consumption and a surge in supply from OPEC+. Brent crude futures for November fell to $67.45, while West Texas Intermediate dropped to $64.01.
- Traders worry about a demand slowdown in the US as the summer driving season ends, but some analysts, like Phil Flynn, aren’t convinced demand is faltering, noting OPEC+ supply hasn’t yet reached the US market.
- Geopolitical tensions, such as Ukrainian strikes on Russian oil terminals, have briefly supported prices, but potential ceasefire talks have reduced this impact. Meanwhile, India is expected to continue buying Russian crude despite US pressure and doubled tariffs.
Oil prices slid on Friday, pressured by expectations of slowing consumption in the United States and a looming surge in supply from OPEC and its allies.
Brent crude futures for October delivery, which expired Friday, ended the session at $68.12 a barrel, down 50 cents, while the more active November contract fell 53 cents to $67.45. West Texas Intermediate dropped 59 cents to $64.01.
Market watchers said the declines reflected shifting focus toward next week’s OPEC+ meeting, where the cartel and its partners are expected to signal further output hikes.
The group has been steadily adding barrels back into the market after last year’s deep cuts, a strategy that has kept downward pressure on prices.
“Supply is rising into a demand environment that looks lackluster,” said Andrew Lipow, president of Lipow Oil Associates. “The market is beginning to wonder what tariffs and slower consumption will mean for the economy next year.”
US Driving Season Winds Down, Adding to Bearish Pressure
The U.S. summer driving season wraps up after Monday’s Labor Day holiday, traditionally the peak fuel-consumption period for the world’s largest oil market.
Traders worry the shift into autumn will expose a demand slowdown just as new supply floods in.
Still, not everyone is convinced demand is faltering. “The pessimism about demand, I’m just not seeing it,” said Phil Flynn, senior analyst at Price Futures Group. “OPEC supply is supposed to increase, but the barrels haven’t shown up in the U.S. yet. Things could remain tight.”
Geopolitical risks briefly lent support earlier in the week after Ukrainian strikes on Russian oil terminals. But reports of potential ceasefire talks between Kyiv’s allies and Moscow blunted the rally.
Meanwhile, U.S. crude stockpiles for the week ending Aug. 22 showed larger-than-expected draws, particularly in freight and industrial fuel demand, suggesting late-summer consumption has been sturdier than feared.
On the international front, Washington is pressing New Delhi to scale back purchases of Russian crude, especially after President Donald Trump doubled tariffs on Indian imports to as high as 50%. But traders say India is set to lift Russian oil imports in September despite the pressure, betting sanctions are unlikely to materialize.
“The prevalent view is that India will ignore U.S. threats and keep buying Russian barrels at a discount,” said Tamas Varga of PVM Oil Associates.
