Oil Prices Extend Losses as Worries Over Rising Supply Grow

Oil Prices Extend Losses as Worries Over Rising Supply Grow

Oil prices continued their downward trend on Friday, extending losses as concerns over rising supply and weaker demand weighed on the market. The global oil benchmark, Brent crude, fell to its lowest level in nearly a month, while U.S. crude oil prices also declined.

Supply Concerns

The main driver behind the decline in oil prices is the growing supply of crude oil in the market. OPEC+, the group of oil-producing countries, has increased production levels to meet rising demand, which has led to an oversupply of oil. Additionally, the United States has seen a surge in oil production, with output reaching record levels in recent months.

"The supply and demand balance is shifting, and that's putting downward pressure on prices," said Energy Aspects analyst, Tom Pugh. "OPEC+ is still increasing production, and that's adding to the supply glut."

Demand Worries

Weaker demand is also contributing to the decline in oil prices. The ongoing COVID-19 pandemic has led to a slowdown in economic activity, which has resulted in reduced demand for oil. Additionally, the war in Ukraine has disrupted global trade and commerce, leading to reduced demand for oil.

"The global economy is still recovering from the pandemic, and that's affecting demand for oil," said Rystad Energy analyst, Bjornar Tonhaugen. "Until we see a significant improvement in demand, prices are likely to remain under pressure."

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