Week in Review – Fuel Prices Ease as Record Output and Trade Shifts Pressure the Market

Fuel prices are easing this week as global markets digest a mix of geopolitical developments, rising production, and shifting trade dynamics. Crude prices are down about $1 per barrel this morning, extending yesterday's losses and putting prices on track for a slightly lower weekly close. A combination of cautious sentiment in equity markets, record U.S. oil output, and steady inventory builds worldwide has kept downward pressure on prices, setting a quieter tone across the energy landscape.

In geopolitics, Israel and Hamas reached a ceasefire agreement that includes the return of all remaining hostages held in Gaza, easing concerns about potential regional supply disruptions. Meanwhile, Saudi Aramco is expected to sell 39 - 40 million barrels of crude to Chinese customers in November, down from 51 million barrels in October. Despite the reduction, steady Asian demand for heavy crude has supported Canadian Western Select (WCS) prices, narrowing its discount to West Texas Intermediate (WTI) to about $10.50 per barrel, the tightest since mid-July.

At the same time, the U.S. imposed sanctions on more than 50 additional entities involved in exporting Iranian oil and liquefied petroleum gas (LPG), tightening restrictions on Iran's energy sector. China also announced a new $56-per-ton fee on U.S. ships calling at Chinese ports, in response to planned U.S. port fees on Chinese-built, operated, or owned vessels. The fee will increase each year through 2028, adding to ongoing trade tensions between the two countries.

Domestically, the U.S. Senate cleared resolutions to reverse restrictions on fossil fuel development on federal lands in North Dakota, Montana, and Alaska. These resolutions, previously passed by the House, now await review by President Donald Trump. Meanwhile, preliminary data from Goldman Sachs Global Investment Research (GIR) suggests that U.S. jobless claims rose to around 235,000 for the week ending October 4, with continuing claims estimated at 1.9 million. The Department of Labor has not issued official data during the government shutdown, though some state-level reporting continues.

According to the U.S. Energy Information Administration (EIA), global petroleum inventories increased by about 1.8 million barrels per day in the second and third quarters of 2025 as supply growth outpaced demand. The EIA also estimates that Chinese crude inventories rose by roughly 900,000 barrels per day between January and August, while China's own production averaged 1.1 million barrels per day between April and August.

In addition, the EIA raised its forecast for U.S. oil production, now expecting record output of 13.53 million barrels per day this year, up from its prior forecast of 13.44 million barrels per day and higher than last year's record of 13.23 million barrels per day. The agency projects average U.S. crude prices of around $65 per barrel this year and Brent at roughly $68.64 per barrel, both down about 15% from last year.

OPEC+ decisions are also shaping the industry. The group announced a modest production increase of 137,000 barrels per day for November, with members emphasizing a cautious approach to maintaining market stability. Analysts noted that rising global inventories and steady supply growth could pressure prices into the $50 range if OPEC+ does not take further action to balance the market.

Prices in Review

Crude prices remained relatively stable through most of the week, hovering just above $61 before edging up midweek to $62.27 on Thursday. However, Friday brought a sharp reversal, with prices tumbling by $2.37, the largest single-day loss of the week. Crude opened at $61.90 on Monday and at $59.90 on Friday, ending the week down $2.00, or -3.23%.

Diesel prices trended upward for most of the week, rising from $2.2584 on Monday to a weekly high of $2.3032 on Thursday. The gains were modest but steady, until Friday, when prices dropped sharply by $0.0743, the biggest single-day move of the week. By week's end, diesel opened at $2.2289 on Friday, marking a loss of $0.0295, or -1.31%.

Gasoline prices stayed relatively flat through most of the week, fluctuating slightly but remaining close to the $1.90 mark from Monday through Thursday. The biggest shift came on Friday, when prices dropped by $0.0517, the largest single-day move of the week. Starting at $1.9039 on Monday and at $1.8514 on Friday, gasoline posted a weekly loss of $0.0525, or -2.76.