Oil prices edged up on Friday, but the market remained under pressure from deep weekly losses, as escalating trade tensions and fears of oversupply kept sentiment cautious.
By 08:50 ET (12:50 GMT), Brent crude futures for October were trading 0.6% higher at $66.85 a barrel, while West Texas Intermediate (WTI) gained 0.5% to $64.18 a barrel. Despite the mild rebound, both benchmarks were set to close the week down more than 4%.
Biggest Weekly Drop Since June
This week’s decline marks the worst performance for crude since late June, driven largely by concerns that new U.S. tariffs will dampen global energy demand. Traders have grown increasingly worried that economic growth could stall as tariff effects ripple through key markets.
Soft labor data out of the U.S. added to demand worries, though consistent draws in domestic inventories helped cap steeper losses, offering some support to prices.
OPEC+ Supply Boost Adds Pressure
The supply outlook has also darkened after OPEC+ confirmed an increase in its production target for September. The move signals further easing of long-standing output curbs that were designed to stabilize prices during past market downturns.
Diplomatic Hopes Clash with Sanction Risks
On the geopolitical front, Russia announced Thursday that President Vladimir Putin is preparing to meet U.S. President Donald Trump in the coming days. The news lifted hopes that a ceasefire in the ongoing Russia-Ukraine conflict might finally be within reach.
But optimism remains tempered by political risk.
“However, it is important to note that President Trump’s deadline for a Russia-Ukraine peace deal expires today, leaving open the risk that the U.S. will still tighten sanctions against Moscow,” said analysts at ING in a research note.
Trump also ramped up pressure on India this week, slapping the country with tariffs of up to 50% in response to its continued purchases of discounted Russian oil. China, Russia’s top oil customer, was also threatened with similar trade penalties.
Reports suggest some Indian state refiners are already pulling back on Russian crude buys due to growing uncertainty.
“Indian exports to the US dwarf the savings that India receives from buying discounted Russian crude oil. Therefore, we believe that India will likely switch to alternative crude supply in order to avoid these additional tariffs. This should lead to increased demand for other grades from the Middle East, continuing to provide support to Dubai relative to Brent,” ING added.
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