By Laila Kearney
NEW YORK (Reuters) -Oil prices fell more than 1% on Friday, extending weekly losses, as analysts forecast a supply glut next year on weak demand despite an OPEC+ decision to delay output increases and deep output cuts until the end of 2026.
futures settled at $71.12 a barrel, for a loss of 97 cents, or 1.4%. U.S. West Texas Intermediate crude futures settled at $67.20 per barrel and fell $1.10, or 1.6%.
During the week, Brent prices lost more than 2.5%, while WTI saw a decline of 1.2%.
A rising number of oil and gas rigs deployed in the United States this week, signaling rising output from the world’s largest crude producer, also pushed prices down.
On Thursday, the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, postponed the start of oil production increases by three months to April and extended the full unwinding of cuts by a year to the end of 2026.
Weak global oil demand and the prospect of OPEC+ ramping up production as prices rise have weighed on trading, said Bob Yawger, managing director of Energy Futures at Mizuho (NYSE:) in New York.
“They’re just waiting for better prices and when they get them, they’ll jump back in,” Yawger said.
OPEC+, which is responsible for about half of the world’s oil production, had planned to start phasing out cuts from October 2024, but a slowdown in global demand – especially from top oil importer China – and rising production elsewhere have forced OPEC+ to postpone the plan several times. time.
“While OPEC+’s decision to delay strengthens near-term fundamentals, it can be seen as an implicit admission that demand is sluggish,” said analysts at HSBC Global Research.
Bank of America predicts that rising oil gluts will push Brent prices to an average of $65 a barrel by 2025, while oil demand growth will rebound to 1 million barrels per day (bpd) next year, the bank said in a statement on Friday. note.
HSBC, meanwhile, now expects a smaller oil market surplus of 0.2 million barrels per day, compared to 0.5 million barrels per day previously, the report said.
Brent has largely stayed within a tight range of $70-$75 a barrel over the past month as investors factored in weak demand signals in China and increased geopolitical risk in the Middle East.
“The general story is that the market is stuck in a fairly narrow range. While immediate developments may temporarily push the market out of this range, the medium-term view remains quite pessimistic,” said PVM analyst Tamas Varga.
Also putting pressure on prices was the number of U.S. drilling rigs, which grew for the first time in eight weeks, the energy services company said Baker Hughes (NASDAQ:) said in its closely watched report on Friday.
Baker Hughes said the number of oil platforms rose by five to 482 this week, the highest level since mid-October, while the number of gas platforms rose by two to 102, the highest level since early November.
Despite this week’s increase in rig counts, Baker Hughes said the total number is still down 37, or 6% less than this time last year.
A mixed US jobs report, which showed a strong recovery in hiring but also a slight increase in unemployment, widened oil losses.
