Oil prices edged lower on Friday as concerns about oversupply and a strengthening U.S. dollar overshadowed signs of stronger demand and a steep drop in U.S. fuel stockpiles.
Brent crude futures fell 0.41% to $72.26 per barrel, while West Texas Intermediate (WTI) crude dipped 0.36% to $68.45. Both benchmarks are on track for weekly losses of 2.2% and 2.7%, respectively.
U.S. crude inventories rose by 2.1 million barrels last week, significantly exceeding analysts’ expectations of a 750,000-barrel build, according to the Energy Information Administration (EIA). However, gasoline stocks plunged by 4.4 million barrels to their lowest since November 2022, while distillate stockpiles, including diesel and heating oil, unexpectedly dropped by 1.4 million barrels.
Despite signs of stronger demand, prices remain under pressure due to the International Energy Agency’s (IEA) forecast that global oil supply will surpass demand by 2025, driven by increased production from non-OPEC countries like the U.S.
OPEC also trimmed its global oil demand growth projections for 2024 and 2025, citing weaker economic performance in China, India, and other regions. This marks the fourth consecutive downward revision in its outlook.
Adding to the bearish sentiment, the U.S. dollar surged to a one-year high, fueled by higher bond yields and Donald Trump’s presidential election victory. A stronger dollar makes oil more expensive for non-dollar buyers, further dampening demand.
