Brent crude futures dropped 49 cents, or 0.74%, to $65.88 a barrel

Oil prices dropped on Friday, adding to big declines in the previous session, as concerns about the possible softening of demand offset concerns about supply disruption from conflicts in the Middle East and Ukraine.

Brent crude futures dropped 49 cents, or 0.74%, to $65.88 a barrel by 0419 GMT, and U.S. West Texas Intermediate crude declined 51 cents, or 0.82%, to $61.86.

The (U.S.) inflation battle doesn’t quite look won, which dampens the demand outlook for oil from the world’s largest economy. Even geopolitical unrest is failing to support oil prices, as fundamentals point to an oversupply and lacklustre demand, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.

Oil prices rose 2% this week on the potential for disruptions to output or trade flows from conflicts, but the benchmarks started tumbling on Thursday and have since wiped out the week’s earlier gains.

The losses began after the International Energy Agency said in its monthly report world oil supply would rise more rapidly than expected this year due to planned output increases by the Organization of the Petroleum Exporting Countries and allies, a grouping known as OPEC+.

OPEC, in its own report, made no change to its relatively high global oil demand growth forecasts for 2025 and 2026, saying the world economy was maintaining a solid growth trend.

The crude market keeps toggling between surplus supply pressures and concerns about short-term disruptions, but the geopolitical worries are providing diminishing support to prices, SDIC Futures said in a daily report.

OPEC+ decided on Sunday to further raise its oil output quotas from October as the group’s leader, Saudi Arabia, pushes to regain market share.