Investing.com–Oil prices fell Friday, on course for weekly losses after OPEC+ extended its current run of supply cuts until well into 2025, highlighting increased concerns over slowing demand.
At 10:10 ET (15:10 GMT), expiring in February fell 1.6% to $70.94 a barrel, while West Texas Intermediate crude futures fell 1.7% to $67.14 a barrel.
The Brent contract is on course to register weekly losses of around 2.5%, while WTI is down around 1%.
OPEC+ extends supply cuts to April
The Organization of Petroleum Exporting Countries and allies, including Russia, a group known as OPEC+, have agreed to extend its current run of supply cuts until April 2025.
The cartel only plans to begin raising output slightly in April, and will keep supply cuts in place until the end of 2026.
OPEC+ had initially planned to begin increasing production from October 2024, but had then repeatedly postponed the move as oil prices tumbled on softening demand, especially in top importer China.
The cartel had also repeatedly cut its demand growth forecasts for 2024 and 2025.
Thursday’s move, while presenting a tighter outlook for crude markets in 2025, also saw traders fretting over worsening demand. While OPEC+ does produce about half of global oil supplies, it has faced increasing competition from production in non-member states, especially the US.
US oil production remained near record highs of 13 million barrels per day in recent months, and is expected to increase under incoming President Donald Trump.
Trump has also vowed trade tariffs on China, which could dent the economy and further undermine crude demand.
Nonfarm payrolls bounced in November
Oil traders have also shown a degree of caution Friday, even after data showed that the US economy added more jobs than anticipated in November, rebounding after job growth almost stalled during the prior month.
Payrolls rose by 227,000 during the month, climbing from the revised higher 36,000 growth seen in October as the labor market reeled from Hurricanes Helene and Milton as well as a big strike at Boeing (NYSE:) factories in the West Coast.
Economists had expected a reading of 202,000.
There are an abundance of important data points due next week, including Chinese inflation and trade data for November, the Central Economic Work Conference, which is expected to offer more cues on the world’s biggest oil importer, and US .
Barclays (LON:) sees upside potential for crude
That said, there could be some room for optimism, with analysts at Barclays stating, in a note, that market is too negative and risks could be tilted to the upside.
“We believe the Brent price will spend more time above $70/bbl than below it given the supply-demand dynamics have been well flagged for some time,” Barclays added.
Overall, it is very possible that underlying supply-demand balances will tighten relative to expectations into 2025, supporting oil prices, particularly as 2026 balances already screen tighter, Barclays said.
(Ambar Warrick contributed to this article.)