Oil prices fall over 1% on supply glut concerns

Oil drilling rigs

Oil prices fell on Friday, heading for a weekly loss amid investor concerns about the future of global demand for crude oil. The International Energy Agency (IEA) warned of a potential supply glut in the markets next year.

Brent crude futures for January delivery dropped by 1.10%, or 80 cents, to $71.76 a barrel as of 09:25 am KSA time.

Meanwhile, US WTI crude futures for December delivery declined by 1.15%, or 79 cents, to $67.91 a barrel.

Brent crude is on track for a 2.7% weekly loss, while WTI crude may see a 3.3% drop, amid uncertainty about the energy market's outlook.

This comes after the IEA's monthly report suggested that the global oil market could face a oversupply of over 1 million barrels per day in 2025, even if the OPEC+ alliance maintains its voluntary production cuts.

Following OPEC's lead, the agency lowered its forecast for global oil demand growth next year due to unfavorable conditions in the Chinese economy.

Additionally, data released yesterday by the EIA showed that US oil inventories increased by 2.1 million barrels last week, compared to expectations of a 1.1 million barrel rise, signaling weaker demand for crude in the world's largest economy.

In other news, official Chinese data indicated a faster pace of retail sales growth in October. However, industrial production slowed slightly, while some improvement was seen in real estate investment.