Oil prices fell on Friday as weak U.S. jobs data dampened the outlook for energy demand and as markets expected OPEC+ to increase production further at its weekend meeting, exacerbating the risk of oversupply. Brent crude futures settled at $65.50 a barrel, down 2.22%, while U.S. crude futures settled at $61.87, down 2.54%.



Eight OPEC+ members will consider further production increases at a meeting on Sunday, according to sources, as U.S. crude oil inventories unexpectedly increased by 2.4 million barrels last week, while analysts had expected a decline.

Phil Flynn, senior analyst at Price Futures Group, said it was a bit of a perfect storm, with prices initially falling on the OPEC news and the jobs report not helping, which suggests the market is weakening.

Data from the U.S. Labor Department showed that non-farm payrolls increased by only 22,000 in August, far lower than the revised 79,000 in July. Economists surveyed had previously expected an increase of 75,000.

Flynn noted that weak employment data will increase pressure on the Federal Reserve to cut interest rates.

John Kilduff, partner at Again Capital, said this was a bad data point for the market, which always exacerbates market volatility, and expectations are rising that OPEC+ may decide to increase production at its meeting on Sunday.

OPEC+ may begin lifting its second round of production cuts a year early, affecting 1.65 million barrels per day (bpd), equivalent to 1.6% of global demand. Sources familiar with the matter said Saudi Arabia wants OPEC+ to consider further increasing oil production before the planned resumption of production increases at the end of next year to regain market share. OPEC+ will hold a video conference on Sunday to discuss how to handle the 1.66 million bpd of production suspension.

The move comes just five months after the organization accelerated its previous phase of production increases. Brent crude futures fell as much as 2.4%. People familiar with the matter said no decision has been made yet, and it's unclear whether the production increase will be finalized on Sunday or in the coming months. They said Saudi Arabia, which previously pushed for an accelerated resumption of production to regain global market share, now wants to increase production further to offset the impact of falling oil prices. Any production increase proposal is likely to face opposition from other members who are more inclined to support oil prices. If production were to increase, it would further solidify OPEC+'s significant strategic shift from price protection to market share preservation, putting pressure on some members, particularly those with capacity constraints.

Saudi Crown Prince Mohammed bin Salman plans to visit Washington in November to meet with Trump, who has called for lower oil prices. The people added that various options, including a period of pausing production increases, remain possible.

"If the eight OPEC+ countries agree to increase production again, we believe this will put significant downward pressure on oil prices. After all, the risk of oversupply is already quite high," analysts at Commerzbank wrote in a report. Despite this, supply risks remain supportive for the market. White House officials said US President Trump urged European leaders on Thursday to stop buying Russian oil. According to sources, Indian Oil Corporation, India's largest refiner, avoided buying US crude oil in its latest tender, instead purchasing 2 million barrels of West African crude and 1 million barrels of Middle Eastern crude.

Russian Presidential Press Secretary Dmitry Peskov said a second round of talks between Russian President Vladimir Putin and US President Donald Trump is possible in the near future. Russian Economic Development Minister Maxim Reshetnikov stated at the Eastern Economic Forum that Russia is ready to resume trade with the United States, but will not do anything that would harm the interests of Moscow's existing partners.

Russian President Vladimir Putin said in Vladivostok on the 5th that if any country sends troops to Ukraine, Russia will regard it as a target of attack. He also said that Ukrainian President Zelensky could come to Most for a meeting, but Zelensky rejected Putin's invitation to meet in Moscow, saying that Putin "can come to Kiev."

HSBC said it still expects Brent crude oil prices to be $65 a barrel in the fourth quarter of 2025; the downside risk lies in increased inventories in OECD countries or continued production increases by OPEC+. As summer ends and demand declines, the market surplus should increase in the fourth quarter of 2025 and the first quarter of 2026. HSBC estimates that the oversupply in the fourth quarter of 2025 will be 1.6 million barrels/day and in 2026 will be 1.9 million barrels/day.

Goldman Sachs predicts that Brent crude, the global benchmark, will fall to just over $50 per barrel next year due to a global oil glut. Analysts including Samantha Dart stated in a report that the current oversupply in the oil market is worsening. They stated, "We estimate that strong non-OPEC oil supply growth, excluding the United States, will push the global market into a surplus of 1.8 million barrels per day by 2026, ultimately forcing Brent prices to a low of just over $50 per barrel by the end of 2026."

Citigroup slightly lowered its forecast for the average price of Brent crude oil in 2026 to $62 per barrel, from its previous forecast of $65 per barrel.