Oil prices saw a slight decline on Friday, with weak demand concerns taking center stage after OPEC+ extended its deep output cuts and postponed planned supply increases until April 2024.
Brent crude futures fell by 20 cents, or 0.3%, to $71.89 per barrel at 0910 GMT, while U.S. West Texas Intermediate (WTI) crude futures dropped 14 cents, or 0.2%, to $68.16 per barrel.
For the week, Brent was on track to fall by 1.5%, while WTI was set to gain 0.2%.
On Thursday, OPEC+—which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies—announced that it would delay the planned increase in oil output by three months until April 2024. Additionally, the group extended its deep production cuts until the end of 2026. These decisions reflect ongoing concerns over global demand, particularly in China, and rising output from other producers.
Giovanni Staunovo, an analyst at UBS, described the outcome of OPEC+’s latest meeting as a positive surprise, noting that the extension of production cuts indicates the group’s commitment to maintaining balance in the oil market. Despite current weak demand, UBS anticipates falling oil inventories and a closely balanced market in 2025, with Brent crude expected to average $80 per barrel next year.
Brent prices have remained in a relatively narrow range of $70-75 per barrel over the past month, as traders weigh weak demand signals from China and geopolitical risks in the Middle East. PVM analyst Tamas Varga noted that while the market might briefly exceed this range on the upside, the medium-term outlook remains pessimistic.
In line with OPEC+’s extended production cuts, Morgan Stanley raised its forecast for Brent crude to $70 per barrel for the second half of 2025, up from $66-68 per barrel. However, the investment bank also predicted an oil market surplus in 2025, although smaller than previously expected.
