Oil prices declined on Friday, though they remain on track to register a weekly gain. The market is navigating opposing forces. On one hand, demand is expected to soften with the approach of the end of the U.S. summer driving season, a period when fuel consumption typically peaks in the world’s largest oil consumer. On the other hand, traders continue to weigh the uncertainty surrounding the stability and availability of Russian supply.
As of 5:40 GMT, Brent crude futures slipped 38 cents, or 0.55 percent, to $68.24 a barrel. Meanwhile, West Texas Intermediate (WTI) futures fell 42 cents, or 0.65 percent, to $64.18 a barrel. Brent is set for a weekly gain of 0.6 percent, while WTI is set to climb by 0.8 percent.
Oil gains on absence of progress on peace talks
Oil prices had earlier been supported by Ukrainian strikes on Russian oil export terminals this week, which heightened concerns about supply disruptions. Sentiment was further influenced by comments from German Chancellor Friedrich Merz, who stated on Thursday that no meeting is planned between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy, underscoring the absence of near-term progress on peace talks.
At the same time, downward pressure on oil prices has emerged from seasonal and supply-side factors. The U.S. summer driving season is drawing to a close with the Labor Day holiday on Monday, signaling weaker fuel demand ahead. In addition, major producers are gradually bringing more barrels to the market as voluntary output cuts expire, contributing to expectations of higher supply.
Rising OPEC+ output, combined with a seasonal slowdown in global refining activity beginning in September, is expected to contribute to an increase in worldwide oil inventories in the coming months. Against this backdrop, analysts noted that oil prices are projected to decline, with Brent crude futures forecast to reach around $63 per barrel in the fourth quarter of 2025.
Tariffs on India in focus
Analysts noted that uncertainty persists over whether the United States and Europe will impose stricter sanctions on Russia following its latest attack on Ukraine, as well as over the possible consequences of newly announced U.S. tariffs on India. These factors have made investors cautious about taking on larger positions as oil prices remain volatile.
Market participants are also closely monitoring New Delhi’s response to Washington’s pressure to curb purchases of Russian crude, after President Trump raised tariffs on Indian imports to as high as 50 percent on Wednesday. Despite this pressure, traders indicated that Russian oil exports to India are expected to increase in September, underscoring India’s continued energy ties with Moscow. (Economy Middle East)