Oil prices fell on Friday, heading towards a weekly decline of more than 3%, under the pressure of easing concerns about supply risks from the conflict between Israel and Hezbollah and the possibility of increased supplies in 2025, even as OPEC+ is expected to extend production cuts.
The official Lebanese News Agency said on Friday that four Israeli tanks entered the western side of the Lebanese border village of Khiam, although the two sides exchanged accusations of violating the ceasefire. However, the ceasefire that took effect on Wednesday reduced oil’s risk premium, pushing prices lower.
Brent crude fell 45 cents, or 0.6%, to $72.83 a barrel, and US West Texas Intermediate crude futures reached $68.68, down 12 cents, or 0.2%, from the last close before the Thanksgiving holiday on Thursday. Brent fell 3% over the week while WTI lost 3.7%.
The conflict in the Middle East has not disrupted supply, which is expected to be more abundant in 2025. The IEA sees the potential for more than 1 million barrels per day of excess supply – equivalent to more than 1% of global production.
The OPEC+ group, which includes the Organization of the Petroleum Exporting Countries and allies including Russia, postponed its next political meeting to December 5 from December 1. OPEC+ is expected to decide on a further extension of production cuts at the meeting.
“Although we expect the OPEC+ group to choose to extend the current cuts into the new year, this will not be enough to completely erase the surplus production we expected for next year,” BMI analysts said in a report.
A Reuters poll of 41 analysts suggests that the price of Brent crude could average $74.53 per barrel in 2025. This represents the seventh consecutive monthly downward revision in the Reuters poll.
