Oil posts 3% weekly decline as supply risks ease
Oil pumping jacks, also known as “nodding donkeys”, operate in an oilfield near Almetyevsk, Tatarstan, Russia, on Wednesday, March 11, 2020.
Andrey Rudakov | Bloomberg via Getty Images
Oil prices fell on Friday, posting a weekly decline of 3%, pressured by easing concern over supply risks from the Israel-Hezbollah conflict and the prospect of increased supply in 2025 even as OPEC+ is expected to extend output cuts.
Brent crude futures fell by 34 cents, or 0.46%, to close at $72.94 a barrel. U.S. West Texas Intermediate crude futures settled at $68, down 72 cents, or 1.05%, compared to Wednesday’s closing price.
Trading activity was muted because of the U.S. public holiday.
For the week, Brent fell nearly 3% while WTI lost 4.55%.
Four Israeli tanks entered a Lebanese border village, Lebanon’s official news agency said on Friday. Both sides have made accusations of ceasefire violations, but the ceasefire that took effect on Wednesday has reduced oil’s risk premium, sending prices lower.
However, the Middle East conflict has not disrupted supply, which is expected to be more ample in 2025. The International Energy Agency sees the prospect of more than 1 million barrels per day (bpd) of excess supply – equal to more than 1% of global output.
“The updated snapshot insinuates that next year promises to be looser than the current one and oil prices are to average below the 2024 level,” said Tamas Varga of oil broker PVM.
The OPEC+ group comprising the Organization of the Petroleum Exporting Countries and allies including Russia delayed its next policy meeting to Dec. 5 from Dec. 1. OPEC+ is expected to decide on a further extension to production cuts at the meeting.
