Global oil prices sharply declined on October 3, reaching their lowest levels in the past four months. The price of a barrel of Brent crude dropped to $64.11, which is 1.9% lower than the previous level, while American WTI fell to $60.48, losing 2.1%.
This is reported by Finway
Reasons for the Decline in Oil Prices
The decrease in oil prices is linked to expectations of rising global inventories as well as a projected drop in demand. Experts note that oil futures have come under pressure due to a potential increase in production by OPEC+ countries in November by 500,000 barrels per day. This move is three times the rate agreed upon for October and is aimed at Saudi Arabia restoring its share in the global energy market.
The issue of increasing production quotas will be discussed at the upcoming meeting of the oil cartel participants.
Market Forecasts and the Impact of Political Factors
Analysts believe that the oil market may face a significant surplus in the fourth quarter of 2025 and in 2026. This is associated with increased OPEC+ supplies, production cuts due to refinery maintenance, and seasonal declines in demand. Experts also predict that oil inventories in the U.S. and globally will rise by the end of the year, which will weaken market conditions.
“We believe that September marked a turning point, and the oil market is now heading towards a significant surplus in the fourth quarter of 2025 and the following year,” noted analysts at JPMorgan.
In the U.S., last week saw an increase in crude oil, gasoline, and distillate inventories. This was a result of decreased demand and lower refinery utilization. According to PVM Energy, analysts have significantly revised their oil consumption forecasts downward—by an average of 150,000 barrels per day since the beginning of the year.
Additional pressure on the market is exerted by political decisions. Finance ministers from the G7 countries announced their intention to strengthen restrictions on Russia to limit its ability to increase oil exports.