Investing.com — Oil prices fell on Friday, on track for weekly losses, after OPEC+ extended its current series of supply cuts well into 2025, highlighting increased concerns about slowing demand.
At 10:10 ET (15:10 GMT), February expiring futures fell 1.6% to $70.94 per barrel, while West Texas Intermediate crude futures fell 1.7% to $67.14 per barrel .
The Brent contract is on track to post weekly losses of around 2.5%, while the WTI is down around 1%.
OPEC+ extends supply cuts until April
The Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, have agreed to extend the current series of supply cuts until April 2025.
The cartel only plans to increase production slightly in April and will maintain supply restrictions until the end of 2026.
OPEC+ had initially planned to start increasing production from October 2024, but had then repeatedly postponed the move as oil prices tumbled due to weakening demand, especially in top importer China.
The cartel had also repeatedly lowered its demand growth expectations for 2024 and 2025.
Thursday’s action, while offering a tighter outlook for crude markets into 2025, also left traders concerned about deteriorating demand. Although OPEC+ produces about half of global oil supplies, it has faced increasing competition from production in non-member countries, especially the US.
US oil production has remained near a record high of 13 million barrels per day in recent months and is expected to increase under incoming President Donald Trump.
Trump has also promised trade tariffs on China, which could hit the economy and further undermine demand for crude oil.
Nonfarm payrolls rose in November
Oil traders also showed some caution Friday even after data showed the U.S. economy created more jobs than expected in November, rebounding after job growth nearly stalled last month.
Payrolls rose by 227,000 during the month, up from a revised higher growth of 36,000 in October, as the labor market reeled from Hurricanes Helene and Milton and a major strike at Boeing (NYSE: ) on the west coast.
Economists had expected a reading of 202,000.
A plethora of key data points will be released next week, including Chinese inflation and trade data for November, the Central Economic Work Conference, which is expected to offer more clues about the world’s largest oil importer, and the US.
Barclays (LON:) sees upside potential for crude oil
That said, there could be some room for optimism, with Barclays analysts saying in a note that the market is too negative and risks could be tilted to the upside.
“We believe Brent prices will remain above $70/bbl for longer than below as the supply-demand dynamics have been well highlighted for some time,” Barclays added.
Overall, it is entirely possible that underlying supply and demand balances will tighten versus expectations in 2025, which will support oil prices, especially as balances already look tighter in 2026, Barclays said.
(Ambar Warrick contributed to this article.)
