Crude oil prices fell on Friday, snapping a two-day rally, as slowing US summer demand and renewed supply concerns from OPEC+ weighed on sentiment. The decline came even as the Russia–Ukraine war showed no signs of resolution, with the European Union weighing secondary sanctions on Russian crude buyers. Moscow’s steady exports to India, China, and Brazil continued to blunt much of the impact of Western measures.
On the InterContinental Exchange, October Brent crude futures, which expired on Friday, settled at USD 68.12 a barrel, down USD 0.50 or 0.73 percent from Thursday. The more active November contract closed at USD 67.45 a barrel, down USD 0.53 or 0.78 percent. West Texas Intermediate (WTI) futures on the New York Mercantile Exchange also declined, falling 0.91 percent or USD 0.59 to USD 64.01 a barrel. Prices have largely traded in a narrow range for the past three weeks as markets wrestle with mixed fundamentals.
Analysts attributed the latest downturn to a confluence of factors. Expectations of softer US gasoline demand after the Labour Day weekend coincided with OPEC+’s move to raise output by 547,000 barrels per day in September, alongside the restart of Russian crude flows to Hungary and Slovakia via the Druzhba pipeline. Pressure from Washington on India to curb Russian oil purchases has added another layer of geopolitical complexity, though Indian refiners are expected to increase Russian imports in September despite Trump’s recent tariff hikes on Indian exports.
The US summer driving season—spanning Memorial Day through Labour Day—typically marks the peak of domestic crude and gasoline consumption. With the holiday weekend signaling its end, traders anticipate a gradual slowdown in fuel demand, which often leads to downward price pressure as refiners shift to winter-grade fuels. The Energy Information Administration reported that US commercial crude inventories have fallen by 22.1 million barrels since May, reflecting strong summer demand, though supplies remain adequate at 418.3 million barrels, about 6 percent below the five-year seasonal average.
Meanwhile, the International Energy Agency revised its global supply outlook higher, projecting oil supply growth of 2.5 million barrels per day this year. The revisions follow OPEC+’s decision to unwind earlier cuts, with eight members fully rolling back voluntary curbs in a bid to reclaim market share. This flood of barrels comes as global demand forecasts remain muted, with energy research firm Kpler lowering projections for China, Brazil, Egypt, and India.
Geopolitical risks continue to loom large. Despite President Trump’s efforts to broker peace between Russia and Ukraine, negotiations remain deadlocked. The Kremlin’s insistence that Kyiv surrender the Donbas region and abandon NATO ambitions has kept talks stalled. Investors are closely watching the upcoming Shanghai Cooperation Organisation meeting for potential signals, though no breakthrough is expected.
Looking ahead, crude oil markets are likely to remain pressured by the combination of easing US demand, rising OPEC+ supply, and the resumption of Russian flows. While ongoing strikes on energy infrastructure in the Russia–Ukraine conflict provide a degree of supply risk, the broader picture remains one of oversupply and softening demand, keeping prices capped in the medium term.
