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Oil set to experience steepest weekly drop in 3 1/2 months

The oil prices were slightly higher on Friday, after four consecutive sessions of declines. However, they are on course for the steepest weekly drop since late June because market expectations expect that OPEC+ could increase output despite concerns about oversupply.

Brent crude futures rose 18 cents or 0.3% to $64.29 per barrel at 0000 GMT. U.S. West Texas Intermediate Crude climbed by 19 Cents, or 0.3% to $60.67 per barrel.

Brent could end the session at its lowest level since last week's May 30. WTI might finish at levels not seen since May 2 if prices don't recover further in this session.

Brent is down 8.3% on a weekly basis while WTI has fallen 7.6%.

Sources told The Week that OPEC+ may agree to increase oil production in November by as much as 500,000 barrels a day, which is triple the October increase, because Saudi Arabia wants to regain market share.

Tony Sycamore is an analyst with IG. He said, "If OPEC+ announces a 500,000 bpd hike this weekend, that's likely to be a large enough increase to send crude back down, first to the support level of $58.00 before testing this year's lowest $55.00 area."

Analysts say that a potential increase in OPEC+ oil supply, a slowdown in global crude refinery operations due to maintenance, and upcoming seasonal drops in demand will accelerate the buildup of oil stocks in the U.S.

Energy Information Administration reported on Wednesday that U.S. crude, gasoline and distillate inventory rose last week due to a decline in refining and demand.

Sycamore stated that "concerns about a US shutdown curtailing economic activity, and the return of Iraqi Kurdish oil to the market are also impacting the crude price."

The Group of Seven finance ministers announced on Wednesday that they would increase pressure on Russia, targeting those countries who continue to buy Russian oil. (Reporting and editing by Jamie Freed; Sudarshan Varadan)

(source: Reuters)