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Oil prices declined on Friday as weaker-than-expected US employment data fuelled concerns over demand, while the prospect of higher output from OPEC and its allies added to market pressure.

Brent crude futures settled $1.49 lower, or 2.2%, at $65.50 a barrel.

WTI dropped $1.61, or 2.5%, to $61.87. 

US non-farm payrolls increased by only 22,000 jobs in August, far below forecasts for a 75,000 rise, according to the Labour Department. The disappointing figures weighed on sentiment for fuel consumption and heightened expectations of further policy debate at the Federal Reserve.

On the supply side, US government data showed crude inventories rose by 2.4 million barrels last week, against projections for a draw. OPEC+ producers are due to meet on Sunday, with eight members reportedly considering advancing the unwinding of additional production cuts amounting to 1.65 million barrels per day, or about 1.6% of global demand. Analysts cautioned that such a move could exacerbate oversupply risks.

Written: Aiman Haikal