Oil Falls on Sluggish Economic Data, Rising Supply Forecasts

Crude oil prices fell on Friday as weak economic data from the United States and China weighed on sentiment and forecasts of a market surplus.

Brent crude oil, against which Nigerian crude oil is priced, fell $0.39 or 0.58% to $66.45 a barrel by 08:50 in Nigeria, while U.S. West Texas Intermediate (WTI) crude oil declined $0.42 or 0.66% to $63.54.

Both benchmarks are on track for weekly losses with WTI down 0.5% and Brent 0.2%.

Fresh data from Beijing showed China’s factory output growth in July fell to an eight-month low, and retail sales expanded at their slowest pace since December.

While refinery throughput rose 8.9% year-on-year, volumes slipped from June levels — the highest since September 2023 — and increased product exports suggested softer domestic fuel demand.

In the United States, higher-than-expected inflation figures and weak labour market data have tempered expectations for an interest rate cut by the Federal Reserve next month.

Analysts note that higher borrowing costs could constrain economic activity and limit fuel consumption.

Supply-side concerns also pressured prices. Bank of America revised its outlook for the global oil market, projecting an average surplus of 890,000 barrels per day between July 2025 and June 2026, citing increased output from the OPEC+ alliance.

The forecast follows an earlier warning from the International Energy Agency that the market appears “bloated” after recent OPEC+ production hikes.

Market participants are also watching geopolitical developments with U.S. President Donald Trump set to meet Russian President Vladimir Putin in Alaska on Friday.

Discussions are expected to include a potential ceasefire in the Ukraine conflict, which could pave the way for an easing of sanctions on Russian crude exports.

Analysts say the combination of slowing demand growth, rising supply, and uncertain monetary policy direction points to continued volatility in the oil market with near-term sentiment likely to hinge on macroeconomic data releases and geopolitical outcomes.