Oil prices fell 1% on Friday, heading for a weekly loss, despite OPEC+ delaying output hikes and extending deep production cuts to the end of 2026. Brent futures fell 85 cents, or 1%, to $71.24 per barrel, while US West Texas Intermediate (WTI) fell 92 cents, or 1%, to $67.38 per barrel.
Analysts expect a supply surplus next year, despite the OPEC+ decision. Bob Yawger, director of energy futures at Mizuho, said the market is waiting for better pricing before increasing demand. Global oil demand, particularly from top crude importer China, has slowed, and rising output elsewhere has put pressure on prices.
The Organization of the Petroleum Exporting Countries and allies (OPEC+) had planned to start unwinding cuts from October 2024, but the slowdown in global demand and rising output have forced them to postpone the plan several times. “While OPEC+’s decision to hold off strengthens fundamentals in the near term, it could be seen as an implicit admission that demand is sluggish,” said analysts at HSBC Global Research.
The International Energy Agency (IEA) has seen a smaller oil market surplus of 0.2 million barrels per day, from 0.5 million barrels per day previously. Many analysts expect oil prices to remain stuck in a narrow range of $70-75 per barrel in the coming months, with the medium-term view remaining pessimistic. A mixed jobs report from the United States, showing an increase in hiring but a slight rise in unemployment, is also pressuring prices.
