A slight rise in prices follows 4 consecutive falling sessions
Oil prices rose slightly during trading on Friday, in an attempt to compensate for part of the large losses accumulated over the week, as prices are heading for the largest weekly decline since late June, with expectations of an increase in OPEC production and fears of global oversupply.
Daily and weekly price performance
Prices witnessed a slight technical recovery during Friday's trading, as WTI rose near the levels of 60.80 dollars per barrel, while Brent crude is trading at the levels of 64.60 dollars per barrel, and this rise was today after 4 consecutive sessions of decline, due to market expectations that the OPEC group may raise production more despite oversupply concerns.
On a weekly basis, Brent crude oil lost about 8.3%, while WTI crude oil fell about 7.6%, marking the largest weekly decline since late June.
Factors affecting the oil markets
Supply factors
Expectations of an increase in OPEC production: news sources reported this week that the OPEC alliance may agree to increase oil production by up to 500 thousand barrels per day in November, equivalent to three times the increase recorded in October.
This is due to Saudi Arabia's quest to regain its market share in the global market.
OPEC official statements: despite these reports, the OPEC Secretariat denied media reports claiming that the group's countries plan to increase their production by 500 thousand barrels per day, stressing that these claims are inaccurate and misleading.
Demand factors
Slowing economic activity: the US government shutdown remains a major concern, as it may lead to a reduction in economic activity, which will negatively affect oil demand.
Seasonal decline: oil demand is witnessing a seasonal decline over the coming months, which increases downward pressure on prices.
Slowing refining activity: the data showed a decline in refinery activity due to seasonal maintenance work, which reduces the actual demand for crude oil.
Data on US inventories
The US Energy Information Administration announced on Wednesday that crude oil, gasoline and distillate inventories rose last week as refining activity and demand declined.
Geopolitical developments and their impact
The finance ministers of the group of seven countries announced on Wednesday that they will take steps to increase pressure on Russia by targeting those who continue to increase their purchases of Russian oil.
The joint statement of the ministers stated the need to intensify pressure on Russian oil exports, which are a major source of income for Russia.
Future forecasts of oil prices Analysts
warn that a possible OPEC production increase may push prices down again, so if expectations are correct and OPEC goes ahead and announces an increase of 500 thousand barrels per day at the beginning of next week, it is likely that the increase will be large enough to push crude oil to fall again, initially to the level of 58 dollars before reaching its lowest levels for this year at 55 dollars.
A possible rise in OPEC supplies, a slowdown in the operation of global crude refineries due to maintenance work, and a seasonal decline in demand over the coming months are expected to accelerate the accumulation of oil inventories in the United States and elsewhere.
