For the concluding week, Brent prices lost more than 2.5 percent while the US West Texas Intermediate (WTI) saw a drop of 1.2 percent.
Analysts projected a supply surplus next year on weak demand despite the decision by the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ to delay output hikes and extend deep production cuts to the end of 2026.
OPEC+ pushed back the start of oil output rises by three months until April and extended the full unwinding of cuts by a year until the end of 2026.
Weak global oil demand and the prospect of OPEC+ ramping up production as soon as prices rise have weighed on trading.
The alliance had already postponed twice the beginning of the output increase.
January 2025 was set as the point from which producers would begin to add supply, but that has since changed due to a slowdown in global demand – especially from top crude importer China.
OPEC+, which is responsible for 50 percent of the world’s supply, will also face competition from rising output elsewhere, which has forced it to postpone the plan several times.
On Friday, Saudi Energy Minister, Prince Abdulaziz bin Salman said that the primary reason for OPEC’s deferral of the production increase to the start of the second quarter is that the first quarter in any year is a weak consumption period.
Brent has largely stayed in a tight range of $70-$75 per barrel in the past month, as investors weighed weak demand signals in China and heightened geopolitical risk in the Middle East.
Bank of America forecast that increasing oil surpluses will drive the price of Brent to an average of $65 a barrel in 2025, while oil demand growth will rebound to 1 million barrels per day next year, the bank said in a note on Friday.
Also in a note, HSBC expects a smaller oil market surplus of 0.2 million barrels per day, from 0.5 million barrels per day previously.
