Oil prices eased on Friday, heading for a third straight monthly decline, as a stronger dollar capped commodities gains while rising supply from major producers globally offset the impact of Western sanctions on Russian exports.
Brent crude futures slipped 33 cents, or 0.51%, to $64.67 a barrel by 0027 GMT, while U.S. West Texas Intermediate crude was at $60.22 a barrel, down 35 cents, or 0.58%.
“A stronger USD weighed on investor appetite across the commodities complex,” ANZ analysts said in a note.
The greenback was boosted after Federal Reserve Chair Jerome Powell said on Wednesday a rate cut in December was not guaranteed.
Both Brent and WTI are set to fall about 3% in October as rising supply is expected to exceed demand growth this year, with the Organization of the Petroleum Exporting Countries and major non-OPEC producers ramping up output to gain market share.
More supply will also cushion the impact of Western sanctions disrupting Russian oil exports to its top buyers China and India.
OPEC+ is leaning towards a modest output boost in December, sources familiar with the talks said ahead of the group’s meeting on Sunday.
The eight OPEC+ members have boosted output targets by a total of over 2.7 million barrels per day – or about 2.5% of global supply – in a series of monthly increases.
Meanwhile, crude exports from top exporter Saudi Arabia hit a six-month high of 6.407 million barrels per day in August, data from the Joint Organizations Data Initiative (JODI) showed on Wednesday, and are set to climb further.
A U.S. Energy Information Administration (EIA) report also showed record production of 13.6 million bpd last week.
U.S. President Donald Trump said on Thursday that China has agreed to begin the process of purchasing U.S. energy, adding that a very large-scale transaction may take place involving the purchase of oil and gas from Alaska.
However, analysts remained sceptical as to whether the U.S.-China trade deal will boost Chinese demand for U.S. energy.
“Alaska produces only 3% of total US crude oil output (not significant), and we think Chinese purchases of Alaskan LNG likely would be market driven,” Barclays analyst Michael McLean said in a note.
(Reporting by Florence Tan; Editing by Jamie Freed)