Oil prices are on track for a weekly decline on Friday, driven by the International Energy Agency’s (IEA) report highlighting an increase in global oil production, easing worries about supply shortages.
The International benchmark Brent crude traded at $72.18 per barrel at 3.40 p.m. local time (1240 GMT) on Friday, down by around 2.3% relative to the closing price of $73.88 a barrel last week.
West Texas Intermediate (WTI), the American benchmark, traded at $68.42 a barrel at the same time on Friday, a decrease of about 2.6% from last Friday's session, which closed at $70.25 per barrel.
On Thursday, in its Oil Market Report, the IEA highlighted that OPEC’s crude oil production increased by 210,000 barrels per day (bpd) in October, reaching 26.97 million bpd. The IEA also forecasted a potential increase in global oversupply this year, supporting the downward movement of prices.
The IEA projects global oil production to grow by an average of 640,000 bpd in 2024, reaching a record 102.91 million bpd. Next year’s global demand is expected to increase by approximately 2.05 million bpd, hitting 104.96 million bpd.
Meanwhile, US inflation data released on Wednesday fueled concerns that the Federal Reserve's fight against inflation may extend longer than anticipated, putting downward pressure on oil prices.
Key inflation indicators have raised questions about whether the Fed will proceed with a rate cut at its December meeting. A rise in inflation could prompt the central bank to pause its rate-cutting plans.
High interest rates are expected to strengthen the US dollar against other currencies, potentially curbing oil demand.
Moreover, unrest in the Middle East continues to impact oil prices as market players fear global supply disruptions.
At least 28 more Palestinians were killed in Israeli attacks in the Gaza Strip in the last 24 hours, bringing the overall death toll to 43,764 since the conflict began 13 months ago, the Health Ministry in the enclave said on Friday.
The ongoing conflicts in the region, home to the vast majority of global oil reserves, limit further price decreases by fueling market player's concerns that the war could spread over a wider area and disrupt oil supply routes.
By Handan Kazanci
Anadolu Agency
energy@aa.com.tr