Oct 31, 2025 (MarketLine via COMTEX) --
There was an overall decrease in crude oil prices during the week due to the imminent announcement of another OPEC+ oil output hike. Prices were also weighed down by doubts over the enforcement of Western sanctions on Russian energy exports. The prolonged US government shut down also weighed on oil prices as it was likely to lower the energy demand from various departments during this phase. Additionally, a slump in the manufacturing activity in China also contributed to demand worries and pressured prices further down. Nevertheless, the downside to oil prices was somewhat contained by from reports that the US and China were close to concluding a trade deal that could spur economic growth. Moreover, the US crude inventory fell for consecutive weeks, giving additional fillip to oil prices.
Some key factors that led to changes in crude oil prices this week are as follows:
Oil prices dipped on Monday, weighed down by concerns over rising crude oil production from the OPEC+ group. The group was likely to announce further increase in its collective output during its policy meet on November 2, 2025. Last week, following the sanctions on Rosneft and Lukoil, OPEC+ member Kuwait had iterated that the group could fill any supply deficit in global markets by raising its production targets. However, the downside to prices was somewhat contained by growing hopes of trade deal between the US and China. Representatives of the two countries continued to engage in trade discussions and a tentative framework of the deal was nearly complete that could facilitate bilateral trade between them at reasonable tariff rates. Oil prices declined on Tuesday, weighed down by uncertainty over the actual impact of sanctions on Russian crude oil exports and global crude oil supplies, in general. India’s largest refiner, Indian Oil, stated that it would continue buying Russian crude oil while ensuring compliance with US sanctions. The head of the International Energy Agency (IEA), Faith Birol, commented that there was adequate capacity globally to mitigate any crude oil supply losses from Russia. Besides, the US exempted the German unit of Rosneft from sanctions, indicating that there was scope for waivers.
Oil prices rose slightly on Wednesday, supported by hopes of the US making good progress in resolving the tariff issues with China. The US President Trump was scheduled to meet his Chinese counterpart, President Xi Jinping, on October 30, 2025, to discuss trade and geopolitics. He was likely to take forward the recently proposed trade framework and expressed confidence in making it into a mutually beneficial agreement. Prices also received support from a large weekly fall in the US commercial crude inventory. As per the Energy Information Administration (EIA) data, crude stockpiles dropped by around 6.9 million barrels for the week ending on October 24, 2025. Gasoline inventory also fell by 5.9 million barrels, thereby implying promising demand for this fuel.Oil prices rose marginally last Thursday and Friday, supported by hopes of a revival in the US economic growth following a 25-basis-point reduction in its benchmark interest rates. The US Federal Reserve announced its second rate cut in two months after reviewing various macro factors to take this decision. It also highlighted that the current government shut down was causing delays in receiving official data on jobs, inflation, and other metrics, which might deter it from cutting rates again in December. Prices also received some support from signs of easing tariff disputes between the US and China. The US decided to lower tariffs on the Chinese imports from 57% to 47% after Trump and Jinping held a discussion in South Korea. China is also anticipated to resume purchases of the US energy products, soybean and other commodities while easing restrictions on rare earth minerals to the US. However, the upside to prices was largely contained by a monthly fall in the Chinese industrial output. As per a private agency survey in China, the manufacturing purchasing managers index (PMI) fell to 50.6 in October 2025 from 51.2 in the previous month, thereby raising concerns over energy demand growth in the country.
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COMTEX_470098174/2227/2025-11-07T18:08:26
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