Oil prices drop dramatically on oversupply fears and U.S. demand risks

Crude oil futures posted a sharp weekly decline, pressured by a renewed wave of supply-side concerns and deteriorating demand outlooks.

After reaching a seven-week high early in the week, WTI crude retreated aggressively, driven by speculation of an OPEC+ production hike, the return of Kurdish exports, and signs of softening global consumption. By Thursday, prices had notched a four-day losing streak, and sentiment turned decisively bearish.

OPEC+ Output Speculation Reignites Oversupply Fears

The central driver behind this week’s sell-off was the resurgence of supply concerns, primarily linked to OPEC+ output plans.

Market chatter early in the week suggested the producer group was preparing for a modest production increase of 137,000 barrels per day (bpd). But by midweek, reports escalated, with multiple sources claiming OPEC+ could authorize a hike as large as 500,000 bpd in November. That would triple the October increase and signal a significant pivot by Saudi Arabia and its allies toward reclaiming lost market share.

Despite OPEC’s attempt to walk back the headlines—labeling the reports as “misleading” on social media—the damage was already done. Traders were quick to price in additional supply, particularly in a market already on edge from other bearish developments. The idea of a half-million-barrel increase has forced many speculative longs to reassess risk, contributing to this week’s accelerated pullback.