Oil markets lose steam ahead of OPEC+ Meeting

October 31, 2025 (MLN): Oil prices slipped on Friday, on track for a third consecutive monthly drop, as a stronger U.S. dollar and disappointing economic data from China limited upward momentum. Meanwhile, increasing global output from major producers continued to outweigh the effects of Western sanctions on Russian exports.

Brent crude futures went up by $0.95, or 1.46%, to $64.05 per barrel.

West Texas Intermediate (WTI) crude futures decreased by $0.30, or 0.50%, to $60.27 per barrel by [11:45 am] PST.

According to ANZ analysts, “a stronger USD weighed on investor appetite across the commodities complex.” The greenback strengthened after U.S. Federal Reserve Chair Jerome Powell cautioned on Wednesday that a rate cut in December was not assured, dampening risk appetite across markets.

Adding to the bearish tone, an official survey revealed that China’s manufacturing sector contracted for the seventh consecutive month in October, underscoring persistent weakness in the world’s second-largest oil consumer.

Both benchmark contracts Brent and West Texas Intermediate (WTI) are poised to drop about 3% in October, marking the third straight month of losses.

Analysts attributed the decline to expectations that rising global production will outpace demand growth this year, as members of the Organization of the Petroleum Exporting Countries (OPEC) and major non-OPEC producers continue to ramp up output to secure greater market share.

OPEC+ is leaning toward a modest production increase in December, ahead of its scheduled meeting on Sunday. The alliance has already boosted output targets by more than 2.7m barrels per day (bpd) roughly 2.5% of global supply through a series of monthly hikes.

Fresh data from the Joint Organizations Data Initiative (JODI) showed Saudi Arabia’s crude exports reached a six-month high of 6.407m bpd in August and are expected to climb further in the coming months.

Meanwhile, the U.S. Energy Information Administration (EIA) reported record crude production of 13.6m bpd last week, adding to global supply pressures.

On the geopolitical front, U.S. President Donald Trump informed Thursday that China has agreed to begin purchasing U.S. energy, including a potential large-scale deal involving oil and gas from Alaska.

However, market analysts questioned whether such an agreement would meaningfully lift Chinese demand.

“Alaska produces only 3% of total U.S. crude output, which is not significant,” said Barclays analyst Michael McLean. “We believe any Chinese purchases of Alaskan LNG would likely be market-driven rather than politically motivated.”

Overall, with ample supply from major producers and weak demand indicators from China, oil markets remain under pressure setting up a cautious tone heading into the OPEC+ meeting this weekend.

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