Oil prices dipped to three-week lows amid projected supply surplus in 2025
OPEC+, which represents nearly half of global oil supply, announced plans to gradually increase production starting in April 2025. The 18-month phased approach will reverse previous output cuts at a slower pace than initially expected.
Oil prices continued their downward trend on Friday, December 6, reaching three-week lows, as industry experts forecast a supply surplus in 2025. This outlook comes despite OPEC+ delayed lifting outputs while extending deep production cuts through the end of 2026.
Brent crude decreased by $0.97 and closed at $71.12/barrel.
WTI dropped by $1.10 and settled at $67.20/barrel.
OPEC+, which represents nearly half of the global oil supply, announced plans to gradually increase production starting in April 2025. The 18-month phased approach will reverse previous output cuts at a slower pace than initially expected. This strategy, despite multiple delays, has played a significant role in stabilizing oil prices, cushioning the market from steeper declines caused by weak global demand.
Further contributing to the bearish sentiment, HSBC revised its oil market forecast, now predicting a supply surplus of 0.2 million barrels per day (bpd), down from an earlier estimate of 0.5 million bpd.
However, geopolitical tensions in the Middle East, along with potential sanctions on Iranian oil exports under the Trump administration, have provided some support, preventing steeper price drops.
Written by: Muhammad Hafiz