Oil Set for Weekly Drop of Over 3% Amid Lower Supply Risks
Oil prices fell on Friday, heading for a weekly decline of more than 3%, pressured by reduced concerns over supply risks linked to the Israel-Hezbollah conflict and the outlook for a more abundant supply in 2025.
This is despite expectations that OPEC+ will extend production cuts.
Israel and Hezbollah exchanged accusations on Thursday over alleged violations of the ceasefire that took effect the day before. However, the agreement eased oil’s risk premium this week, pushing prices lower.
Brent crude lost 48 cents, or 0.7%, to $72.80 per barrel, while U.S. West Texas Intermediate (WTI) futures dropped 20 cents, or 0.3%, to $68.68, compared to the last close before the Thanksgiving holiday. Both benchmarks of UKOIL have seen a decline of over 3% for the week.
Despite the ongoing Middle East conflict, oil supply has remained uninterrupted, and 2025 is expected to see more abundant production.
Forecasts and Outlook
The International Energy Agency (IEA) forecasts an excess supply of over 1 million barrels per day, which is more than 1% of global output.
OPEC+, the group comprising the Organization of the Petroleum Exporting Countries and its allies, including Russia, postponed its upcoming monetary policy meeting from December 1 to December 5. The group is expected to decide on further extending production cuts at the meeting.
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