Olmo brace sends Barcelona nine points clear
Raphinha was also on target as Hansi Flick's side stretched its advantage over second-placed Real Madrid, whose scheduled showdown with Valencia this weekend was postponed because of the catastrophic and deadly floods in the Valencia region.
Barca broke the deadlock after just 12 minutes. Olmo latched on to Lamine Yamal's brilliant assist, executed again with the outside of his left boot, before beating Espanyol goalkeeper Joan Garcia with a well-taken first-time finish.
The hosts doubled their lead 11 minutes later with Marc Casado finding Raphinha, who bravely lifted over the advancing Garcia.
It was 3-0 just after the half-hour mark, as Olmo received Alejandro Balde's pass before drilling home from the edge of the penalty area.
Espanyol, which saw two goals disallowed after VAR reviews, pulled one back when Javi Puado turned home Carlos Romero's cross in the 63rd minute.
However, it proved a consolation for the visitors, who suffered their sixth defeat in seven league games.
Now unbeaten in 27 LaLiga derbies against Espanyol, Barcelona has now scored 40 goals this season, its second-highest tally after the first 12 games of a LaLiga season – 42 in 1950-1951.
After Olmo's brace, which took his tally for the campaign to five, Barcelona is the only team with four different players to have scored at least five goals in Europe's top five leagues this term.
But boss Flick still demanded Barcelona to make improvements after a sloppy second-half showing.
"The second half today, I told the team that I would accept it because they have done a great job so far. But on Wednesday [Thursday AEDT in the UEFA Champions League] we need a better performance," the German said.
"The derby is always complicated. In the first half the team showed a great level and in the second half we didn't play as we usually do.
"We lost a lot of balls and that's one of the reasons why Espanyol were able to pull one back.
"We have to improve on that... But the important thing is the victory and I would highlight the concentration of all the players."
Daniel Olmo Carvajal
FC Barcelona
Raphael Dias Belloli
FC Barcelona