Oil heads for third monthly decline as dollar, OPEC+ supply weigh

LONDON: Oil prices were flat on Friday, but were heading for a third consecutive monthly decline, as a stronger U.S. dollar, weak China data and rising supply from major global producers weighed.

Retracing some earlier losses, Brent crude futures were up 29 cents, or 0.5%, at $65.29 a barrel by 1303 GMT, while U.S. West Texas Intermediate crude was at $61.10 a barrel, up 53 cents, or 0.9%.

The U.S. dollar USD= was near three-month highs against its major peers, making purchases of dollar-denominated commodities such as oil more expensive.

Meanwhile, sources told Reuters that Saudi Arabia, the world’s biggest oil exporter, may reduce its December crude price for Asian buyers to multi-month lows, sources said, sounding a bearish note.

Oil also slipped after an official survey showed China’s factory activity shrank for a seventh month in October.

Brent and WTI are set to fall 2.6% and 2%, respectively, in October with the Organization of the Petroleum Exporting Countries and major non-OPEC producers ramping up output.

More supply will also cushion the impact of Western sanctions disrupting Russian oil exports to its top buyers China and India.

A Reuters survey forecast Brent will average $67.99 per barrel in 2025, about 38 cents above last month’s estimate. WTI is expected to average $64.83, slightly above September’s estimate of $64.39.

OPEC+ is leaning towards a modest output boost in December, people familiar with the talks said ahead of the group’s meeting on Sunday.

Meanwhile, crude exports from top exporter Saudi Arabia hit a six-month high of 6.407 million bpd in August, data from the Joint Organizations Data Initiative showed.

A U.S. Energy Information Administration 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.