HG MARKETS:

Oil prices gained modestly on Friday, recovering some ground after three consecutive sessions of losses. However, the market remains on course for its second straight weekly decline, pressured by persistent concerns over excess supply and signs of weakening demand in the United States.Brent crude futures rose by 55 cents, or 0.9%, to $63.93 per barrel, while U.S. West Texas Intermediate (WTI) crude increased 60 cents, or 1%, to $60.03 per barrel. Despite Friday’s uptick, both benchmarks are still expected to post weekly losses exceeding 1.5%, as leading global producers continue to ramp up output.

Market sentiment this week was dampened by data showing an unexpected build of 5.2 million barrels in U.S. crude inventories, which reignited fears of a supply glut.The U.S. Energy Information Administration (EIA) confirmed that crude stockpiles rose more than anticipated, driven by higher imports and reduced refining rates. In contrast, gasoline and distillate inventories both declined, suggesting uneven demand patterns across fuel products.

Adding to the bearish tone, ongoing economic uncertainty linked to the longest government shutdown in U.S. history has started to weigh on energy demand forecasts. The Trump administration recently ordered flight reductions at several major airports due to a shortage of air traffic controllers, while private sector reports point to a softening labor market in October—factors that could slow fuel consumption.

On the supply side, OPEC and its allies (OPEC+) announced plans to slightly increase production in December. However, the group also decided to pause further output hikes through the first quarter of next year, signaling caution amid growing concerns about an oversupplied market. Reflecting these dynamics, Saudi Arabia, the world’s largest oil exporter, sharply reduced its official selling prices for December shipments to Asian buyers, highlighting competitive pressures in the region and the desire to retain market share.

Despite oversupply fears, geopolitical tensions continue to provide some underlying support for prices. Western sanctions on Russia and Iran are disrupting crude flows to major importers such as China and India, tightening regional supply chains.Meanwhile, in a related development, Swiss commodities trader Gunvor announced the withdrawal of its proposal to acquire the foreign assets of Russian oil company Lukoil. The decision came after the U.S. Treasury labeled Lukoil a “puppet” of the Russian government and signaled opposition to the deal, underscoring Washington’s firm stance on limiting Russian energy influence abroad.