Oil prices fell slightly on Friday as concerns about oversupply and demand resulting from a stronger dollar outweighed a sharp reduction in U.S. fuel inventories.
Brent oil futures were down 30 cents, or 0.41 percent, at $72.26 a barrel by 0105 GMT. West Texas Intermediate crude oil futures fell 25 cents, or 0.36%, to $68.45.
For the week, Brent is expected to fall by around 2.2% while WTI is expected to fall by 2.7%.
US crude inventories increased by 2.1 million barrels last week, according to the Energy Information Administration (EIA), far more than analysts' expectations of an increase of 750,000 barrels.
Meanwhile, gasoline stocks fell by 4.4 million barrels last week to their lowest level since November 2022, the EIA said, while analysts had expected an increase of 600,000 barrels according to a Reuters poll. Stocks of distillates, which include diesel and heating oil, also unexpectedly fell by 1.4 million barrels, the data showed.
Signs of stronger demand supported oil prices, ANZ analyst Daniel Hynes said. “However, prices came under pressure after the market was reminded of the bleak demand outlook.
The International Energy Agency projects that global oil supply will exceed demand in 2025, even as cuts from OPEC+, which includes the Organization of the Petroleum Exporting Countries and its allies such as Russia, are maintained as increased production by the United States and other foreign producers outpaces weak demand.
The Paris-based agency raised its 2024 demand growth forecast by 60,000 barrels per day, to 920,000 bpd, and left its 2025 oil demand growth forecast unchanged, at 990,000 bpd.
This week, OPEC cut its forecast for global oil demand growth for this year and 2025, highlighting weakness in China, India and other regions, marking the fourth consecutive downward revision prospects for 2024.
Also pushing up oil prices, the dollar jumped to its highest level in a year on Thursday and headed for a fifth straight daily gain, fueled by higher yields and Donald Trump's presidential election victory in the UNITED STATES.
A stronger greenback makes dollar-denominated oil more expensive for holders of other currencies, which can reduce demand.
