Crude oil prices dropped for the third straight day on Friday, weighed down by growing worries over excess supply and tepid demand forecasts. Despite the U.S. Federal Reserve’s recent 25-basis-point rate cut intended to spur economic activity, the markets remain nervous. Additional output from OPEC+ and a global supply glut have offset hopes of stronger demand, though some support came from expectations that U.S. diesel use in the EU will stay firm.
Benchmark Brent crude futures for near-month delivery fell about 1.1%, USD 0.76 a barrel, landing at USD 66.68 on the Intercontinental Exchange. West Texas Intermediate (WTI) futures in the U.S. dropped 1.4%, or USD 0.89, to USD 62.68 on the NYMEX. Over the last three trading sessions, both benchmarks have lost roughly 4%.
An analyst from Kedia Stocks and Commodities Research noted that the drop reflects “persistent oversupply concerns and weak fuel demand trends in the U.S.” Global oil demand has been averaging about 104.4 million barrels per day through mid-September, slightly under recent expectations. Also, after the summer travel peak, demand in China and the U.S. cooled, further denting sentiment. On the brighter side, demand in the EU, Middle East, and Latin America remains steadier, and there are hopes that Asia could provide a lift if the economic signals improve.
One of the biggest shadows over the market is inventory build-ups. As the summer demand lull begins to set in, supplies are rising, driven by production increases from OPEC+ and other non-OPEC sources. The International Energy Agency forecasts that global supply growth in 2025 and 2026 will meaningfully outpace demand growth, pushing inventories higher through late 2025 into early 2026. According to the U.S. EIA’s Short-Term Energy Outlook, Brent is expected to average about USD 59/b in the fourth quarter of 2025 and could drop toward USD 50/b in early 2026 if supply continues to build.
Even though U.S. commercial crude stocks (excluding the strategic reserve) saw a significant drop in the week ending September 11, they still hover slightly below their five-year average. Gasoline stocks also declined, while distillate stocks rose, another mixed signal on demand.
Looking ahead, oil markets are likely to stay under pressure from rising production and inventory gluts. Still, losses might be capped if demand from regions like Asia picks up, or if diesel use in the EU holds strong. Geopolitical or supply-disruption risks could also offer intermittent support to prices.
