Oil on track for steepest weekly plunge in 3-1/2 months

Oil prices rose slightly on Friday after four straight sessions of declines but were on track for their steepest weekly decline since late June due to market expectations that the OPEC+ group could hike output further despite oversupply concerns.

Brent crude futures gained 18 cents, or 0.3%, to $64.29 a barrel by 0000 GMT. U.S. West Texas Intermediate crude climbed by 19 cents, or 0.3%, to $60.67 a barrel.

If prices do not further recover in this session, Brent could close at the lowest level since the week ended May 30, while WTI would finish at a level not seen since May 2.

On a weekly basis, Brent has plunged 8.3%, while WTI is 7.6% lower.

OPEC+ could agree to raise oil production by up to 500,000 barrels per day in November, triple the increase for October, as Saudi Arabia seeks to reclaim market share, sources told Reuters this week.

“If OPEC+ do go ahead and announce a 500,000 bpd increase this weekend, it’s likely a big enough increase to send crude oil lower again, initially to support at $58.00, before a test of this year’s lows $55.00 area,” said Tony Sycamore, an analyst at IG. Potentially higher OPEC+ supply, slowing global crude refinery runs due to maintenance and a seasonal dip in demand in the months ahead are set to accelerate oil stock builds in the U.S. and elsewhere, analysts say. The Energy Information Administration said on Wednesday that U.S. crude oil, gasoline and distillate inventories rose last week as refining activity and demand softened.

“Concerns that a US government shutdown will curtail economic activity and the resumption of Iraq’s Kurdish oil exports is also weighing on the crude price,” Sycamore said.

The Group of Seven nations‘ finance ministers said on Wednesday they will take steps to increase pressure on Russia by targeting those who are continuing to boost purchases of Russian oil.