Oil Prices Edge Up Amid Supply Fears, Demand Concerns

Oil prices rose on Friday, offering a brief rebound after three days of losses, but the market still faces downward pressure as global supply increases and U.S. demand slows. Brent crude gained 55 cents to $63.93 per barrel, while U.S. West Texas Intermediate rose 60 cents to $60.03. Despite the uptick, both benchmarks are set for a second consecutive weekly drop of over 1.5%.

The increase in inventories in the U.S. has fueled worries about oversupply. U.S. crude stocks unexpectedly rose by 5.2 million barrels due to higher imports and reduced refining activity. Meanwhile, gasoline and distillate inventories saw declines, highlighting uneven dynamics in the energy market.

Supply-side factors continue to weigh heavily. OPEC+ recently announced a slight increase in production for December but paused further hikes in early 2026 to avoid flooding the market. Saudi Arabia, the world’s largest oil exporter, also cut December prices sharply for Asian buyers, signaling its concern over market balance.

Geopolitical tensions provide mixed signals. Sanctions on Russia and Iran have disrupted supplies to major importers like China and India, offering partial support to prices. China’s crude imports rose 2.3% in October from September and 8.2% year-on-year, keeping barrels out of OECD countries where inventories remain low.

Elsewhere, European and U.S. restrictions impacted major deals. Swiss trader Gunvor withdrew its proposal to acquire Russian energy firm Lukoil’s foreign assets after objections from U.S. authorities, emphasizing ongoing pressure on Russian exports.

Despite the minor rally, analysts caution that the market remains finely balanced between oversupply fears, geopolitical factors, and softening U.S. demand. Investors and traders will likely keep a close watch on inventory reports, production decisions, and global import trends as the year closes.