Oil Prices Dip on U.S Inflation Concern, OPEC+ Output Surges

Oil Prices Dip on U.S Inflation Concern, OPEC+ Output Surges

Oil prices dipped on Friday over concern that rising US inflation and President Donald Trump’s push for new tariffs could sap demand, adding to pressure from the International Energy Agency’s (IEA) forecast for stronger global supply growth.

Brent crude was trading at $65.72 per barrel, down 0.5% from the previous close of $66.08. US benchmark West Texas Intermediate (WTI) decreased by 0.6% to $61.68 from $62.05 in the prior session.

Investors grew cautious as tariff-driven inflation risks clouded expectations that the Federal Reserve (Fed) still has room to cut interest rates.

International Monetary Fund (IMF) spokesperson Julie Kozack said at a news conference that, given the downside risks to employment, there is room for the Fed to start lowering its policy rate.

Analysts say a rise in inflation in the US, the world’s top oil consumer, could force the Fed to delay interest rate cuts, weighing on demand and pushing prices lower.

Meanwhile, the Financial Times reported that the US will ask G7 members, along with India and China, to impose steep tariffs on Russian oil to push Moscow toward peace talks with Ukraine.

G7 finance ministers are expected to discuss the proposal in a video call on Friday.

 Trump this week urged the EU to impose tariffs of up to 100% on India and China.

Last month he raised tariffs on Indian imports to 50% and in April increased duties on Chinese goods, before later adjusting some measures amid market concerns.

Prices also weakened after the IEA said in its September Oil Market Report that global supply will rise faster than expected this year on planned output increases by OPEC and its allies, known as OPEC+.

The agency revised up supply growth by 190,000 barrels per day in 2025 and 150,000 in 2026.

World output is expected to climb by 2.7 million barrels per day to 105.8 million this year and by another 2.1 million to 107.9 million in 2026. OPEC+ is set to add 1.3 million barrels per day in 2025 and 1 million in 2026, roughly matching growth from producers outside the group.

OPEC Output Surges

Crude oil production by the Organization of the Petroleum Exporting Countries (OPEC) rose by 478,000 barrels per day (bpd) in August compared to the previous month, reaching around 27.95 million bpd, according to the group’s latest Monthly Oil Market Report.

The report showed that the largest output increase came from Saudi Arabia, while Iran recorded the biggest decline.

Saudi Arabia, the group’s top producer, increased its output by 258,000 bpd to about 9.71 million bpd. Iran’s production, meanwhile, declined by 27,000 bpd to approximately 3.22 million bpd.

Meanwhile, total crude production by the OPEC+ alliance, comprising OPEC members and some major non-OPEC producers, rose by 509,000 bpd to 42.4 million bpd during the same period.

OPEC kept its global oil demand growth forecast for 2025 unchanged, projecting an increase of 1.29 million bpd year-on-year, bringing total demand to 105.14 million bpd.

Most of the growth is expected to come from non-OECD countries, where demand is seen rising by 1.15 million bpd to 59.31 million bpd, led by Asian countries.

Demand in OECD countries is projected to rise by just 140,000 bpd to 45.83 million bpd, driven mainly by OECD Americas and supported by a slight increase in OECD Europe, while OECD Asia-Pacific demand is forecast to decline slightly year-on-year.

For 2026, OPEC expects demand to grow by around 1.38 million bpd, reaching 106.52 million bpd.

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