Oil prices fell on Friday, with Brent crude futures down 66 cents to $71.43 per barrel, and US West Texas Intermediate crude futures down 65 cents to $67.65 per barrel. Analysts predict a supply surplus in 2025 despite the OPEC+ decision to postpone planned supply increases and extend deep output cuts until the end of 2026.
The Organization of the Petroleum Exporting Countries (OPEC+) delayed the start of oil production rises by three months to April, citing global demand slowdowns, particularly in China. This move aims to balance the market while keeping output low.
Analysts at UBS and Bank of America expect a supply surplus next year, with Brent prices averaging around $65 per barrel. However, HSBC revised its forecast, predicting a smaller surplus of 0.2 million barrels per day (bpd).
The tight range of $70-75 per barrel has been maintained for the past month as investors weigh weak demand signals and heightened geopolitical risk in the Middle East. Analysts remain pessimistic about the medium-term outlook, with prices potentially breaking out of this range briefly but expected to return to their current levels soon.
Source: https://www.reuters.com/business/energy/oil-prices-dip-extended-opec-supply-cuts-highlight-weak-demand-2024-12-06