Oil prices slipped on Friday, driven by concerns over weak demand after OPEC+ extended its deep output cuts and delayed planned supply increases until the end of 2026.
Brent crude futures were down 20 cents, or 0.3%, at $71.89 per barrel by 0910 GMT, while U.S. West Texas Intermediate crude futures fell 14 cents, or 0.2%, to $68.16 per barrel.
For the week, Brent was set to decline by 1.5%, while WTI was on track for a 0.2% increase.
On Thursday, OPEC+ delayed its planned output increases by three months, pushing the start date to April, and extended the full unwinding of cuts by a year to the end of 2026. The group, which accounts for about half of global oil production, had originally planned to begin easing cuts in October 2024.
However, a slowdown in global demand, particularly from China, and increasing output from other producers led to repeated delays of this plan.
“The outcome of the latest meeting of OPEC+ members surprised us positively … The extension of the production cuts shows the group remains united and is still targeted to keep the oil market in balance,” UBS analyst Giovanni Staunovo said.
In contrast to market expectations, UBS expects falling oil inventories this year and a closely balanced market in 2025 to support prices over the coming months, Staunovo added. UBS forecasts Brent to average $80 next year.
Brent has largely stayed in a tight range of $70-75 per barrel in the past month, as investors weigh weak demand signals in China and heightened geopolitical risk in the Middle East.
“The general narrative is that the market is stuck in its rather narrow range. While immediate developments might push it out of this range on the upside briefly, the medium-term view remains rather pessimistic,” PVM analyst Tamas Varga said.
Morgan Stanley raised its Brent price forecast to $70 per barrel for the second half of 2025, from $66-68 a barrel, noting that the updated OPEC+ production agreement tightened its supply and demand outlook, especially for the second half.
Still, Morgan Stanley estimates an oil market surplus in 2025, although smaller than before.
