Oil prices edged lower on Friday, December 6, with weak demand in focus after the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ postponed planned supply increases and extended deep output cuts to the end of 2026.
Brent crude futures fell 6 cents, or 0.1 percent, to $72.03 per barrel and the US West Texas Intermediate (WTI) crude futures lost 1 cent to $68.29 per barrel.
For the week, Brent was on track to drop more than 1 percent while the WTI recorded a 0.1 percent gain.
OPEC+ had been planning to start unwinding cuts from October 2024 and after a meeting on Thursday, it agreed to extend the 2 million barrels per day and the 1.65 million barrels per day of cuts until the end of 2026 from the end of 2025 respectively.
Under its formal output strategy, the broader OPEC+ coalition is now restricting its combined production to 39.725 million barrels per day until December 31, 2026, after previously only applying this quota throughout 2025.
Eight OPEC+ members will now extend their 2.2 million barrels per day voluntary production decline into the first quarter, and will begin hiking production incrementally between April and September 2026.
The group pumps around half of the world’s supply, but market analysts noted that the market is facing a surplus from non-OPEC producers,
Also, global demand has slowed, especially in China, forcing OPEC+ to postpone the plan several times.
Cooling US Dollar provided some some support for oil prices as it makes prices cheaper for holders of other currencies.
There are high expectations that the Federal Reserve will cut interest rates this month, a move that will further ease the Dollar’s strength and support the oil market.
The market is also looking forward to US President-elect Donald Trump, who takes takes office in January. He could impose new sanctions on Iran, tariffs on China and has pledged an end to the Russia-Ukraine war.
Meanwhile, Donald Trump’s Middle East envoy has travelled to Qatar and Israel to kick-start the US president-elect’s diplomatic push to help reach a Gaza ceasefire and hostage release deal before he takes office.
Also, Israel said on Tuesday that it would return to war with Hezbollah if their ceasefire collapses and its attacks would go deeper into Lebanon and target the state itself.
