Oil Prices Reduce Week-on-Week as US Dollar Strengthens

Oil Prices Reduce Week-on-Week as US Dollar Strengthens

Oil prices were on track for a weekly decline Friday as weak US demand and a stronger dollar offset support from OPEC+’s decision to pause output hikes and renewed geopolitical tensions in Eastern Europe.

International benchmark Brent crude traded at $63.88 per barrel, down from last Friday’s close of $64.57, reflecting a weekly fall of about 1.1%.

US benchmark West Texas Intermediate (WTI) was at $60.08 per barrel, compared with $60.69 last week, showing a decrease of around 1%. Concerns over slowing US economic activity pressured prices, with data showing continued weakness in the manufacturing sector.

The Institute for Supply Management’s manufacturing Purchasing Managers Index (PMI) slipped to 48.7 in October, signalling contraction for an eighth straight month.

Official figures from the Energy Information Administration (EIA) also showed US commercial crude inventories rising by 5.2 million barrels to 421 million, suggesting subdued demand in the world’s largest oil consumer.

A stronger US dollar further limited buying interest, as dollar-priced crude became costlier for holders of other currencies. Expectations that the Federal Reserve will delay rate cuts also dampened investor appetite.

Losses were capped by OPEC+’s move to pause output hikes and escalating tensions between Russia and Ukraine. At its virtual meeting on Sunday, eight OPEC+ members — including Saudi Arabia, Russia, Iraq, and the UAE — confirmed a modest 137,000-barrel-per-day (bpd) increase in December production but agreed to pause additional hikes through March 2026 due to weaker seasonal demand.

The decision, part of a phased rollback of 1.65 million bpd voluntary cuts introduced in 2023, was seen as a preemptive step to prevent oversupply.

“We suspect they’re also aware that the market may struggle to take any additional barrels, particularly if disruptions to Russian supply end up being temporary,” Daniel Hynes, senior commodity strategist at the Australia and New Zealand Banking Group, said in a note Monday.

Intensified fighting between Russia and Ukraine also lent some support, with drone and missile strikes damaging energy infrastructure in Ukraine’s Odesa and Zaporizhzhia regions and hitting an oil terminal in Russia’s Tuapse port, heightening supply concerns ahead of winter. GCR Keeps FBNQuest Merchant Bank Outlook on Rating Watch Negative