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Investing.com - Oil prices fell in European trade on Friday, as traders attempt to gauge whether the OPEC+ producer group will agree to further increase output at a meeting scheduled to take place over the weekend.
Crude prices were headed for weekly declines as an unexpected build in U.S. inventories also sparked some concerns over cooling fuel demand.
Brent oil futures for November fell 2.0% to $65.64 a barrel, while West Texas Intermediate crude futures dipped by 2.2% to $62.09 a barrel by 09:55 ET (13:55 GMT).
OPEC+ output uncertainty weighs on oil
Oil was on track to log one-week declines of between 1% and 1.6%, with investors fretting over the potential outlook of rising supplies and sluggish demand.
The Organization of the Petroleum Exporting Countries and its allies, also known as OPEC+, is set to meet on Sunday. Recent reports have suggested that its members were considering approving even more output hikes, following around 2.2 million barrels per day of expanded output so far in 2025.
More production upticks would mark an additional scaling back of OPEC+’s deep output cuts over the last two years, with the group seeking to shore up output and reclaim greater market share.
Russian production was also a point of focus for markets, amid efforts by the U.S. to dissuade major buyers India and Europe from buying more oil from Moscow. However, Russia recently agreed to supply at least 2.5 million metric tons of oil to China annually, via Kazakhstan, which is likely to keep the country’s crude production high.
U.S. oil inventories unexpectedly rise
Elsewhere, oil markets were also spooked by an unexpected build in U.S. oil inventories.
Data from the Energy Information Administration showed on Thursday that U.S. oil inventories grew by 2.415 million barrels in the week to August 29, blowing past expectations for a draw of 2 million barrels.
Distillate inventories also rose, while gasoline inventories clocked a much bigger-than-anticipated draw.
The readings ramped up concerns over cooling U.S. fuel demand, especially after the end of the travel-heavy summer season.
Signs of a cooling labor market have also threatened to cloud the outlook for U.S. fuel demand in the coming months. A closely-watched report on Friday showed that the U.S. economy added fewer jobs than anticipated in August, offering a fresh indication of an easing in the American labor market that could bolster the case for the Federal Reserve to slash interest rates at its next policy meeting later this month.
(Scott Kanowsky contributed reporting.)