Oil prices fell on Friday, heading for a third straight monthly decline, as a firm U.S. dollar and disappointing Chinese data weighed on sentiment. Continued output growth from major producers also offset the impact of Western sanctions that have disrupted Russian crude flows.
By 07:44 GMT, Brent crude futures eased 12 cents, or 0.18%, to $64.88 a barrel, while U.S. West Texas Intermediate (WTI) crude slipped 21 cents, or 0.35%, to $60.36.
“A stronger USD weighed on investor appetite across the commodities complex,” ANZ analysts said in a client note.
The greenback strengthened after Federal Reserve Chair Jerome Powell signaled on Wednesday that another rate cut in December was “not guaranteed,” boosting the dollar and adding pressure on dollar-priced commodities.
Crude also came under strain following official data showing that China’s manufacturing activity contracted for the seventh consecutive month in October, reinforcing concerns about demand from the world’s top oil importer.
Both Brent and WTI are on track to fall about 3% this month as global supply growth continues to outpace demand. Producers within the Organization of the Petroleum Exporting Countries (OPEC) and their non-OPEC partners have steadily ramped up output in an effort to maintain market share.
The additional supply is expected to cushion the impact of Western sanctions on Russian oil exports to key markets such as China and India.
Sources familiar with the discussions said OPEC+ members are leaning toward a modest production increase in December, ahead of the group’s scheduled meeting on Sunday. The alliance has already lifted its production targets by more than 2.7 million barrels per day (bpd), equivalent to roughly 2.5% of global supply, through a series of gradual monthly increases.
Saudi Arabia, the world’s largest oil exporter, boosted its crude shipments to a six-month high of 6.407 million bpd in August, according to data from the Joint Organizations Data Initiative. Exports are expected to climb further in the coming months. In the U.S., Energy Information Administration data showed output hit a record 13.6 million bpd last week.
Meanwhile, U.S. President Donald Trump said Thursday that China had agreed to start purchasing American energy, noting that “a very large-scale transaction may take place involving the purchase of oil and gas from Alaska.”
Still, analysts remained skeptical about the potential boost to Chinese demand. Barclays’ Michael McLean wrote, “Alaska produces only 3% of total U.S. crude oil output (not significant), and we think Chinese purchases of Alaskan LNG likely would be market driven.”