Lagos — Despite OPEC+’s decision to postpone the rollback of its oil production cuts, the benchmarks were on track for a weekly loss earlier today.
One reason for this was that the OPEC+ decision was expected. The other was that this decision strengthened the perception that oil demand is too weak for the group to bring back any supply.
This perception may well be misleading, by the way, as some analysts have already warned, with the oil market set for a correction next year.
Meanwhile, however, prices remain depressed, with Brent crude trading at $72.05 per barrel at the time of writing, and West Texas Intermediate at $68.34 per barrel, both slightly down from Thursday’s close.
“Sidelining the surprise drawdown in US crude stockpiles last week and OPEC+ extending plans to ramp up output until September 2026, oil prices eased further amid growing concerns over dented global demand and oversupplied markets,” Phillip Nova market analyst Priyanka Sachdeva told Reuters.
“OPEC+ has given a robust indication that it continues to be willing to balance the oil market,” Morgan Stanley analysts said, as quoted by Bloomberg. “We still estimate a surplus next year, but smaller than before,” they added, revising upwards their Brent crude average forecast for the third and fourth quarters of this year.
“The action taken by OPEC+ eats quite heavily into the surplus that was expected over 2025,” ING’s Warren Patterson and Ewa Manthey wrote in a note. “However, the extension and the slower return of barrels is not enough to push the market into deficit next year. The move still leaves the market in surplus in 1H25, although admittedly the surplus is more manageable at around 500k b/d, compared to 1m b/d expected previously,” the analysts wrote.
“We do not think the market has priced in the full extent of how much oil has been removed,” Standard Chartered analysts said.
*Irina Slav for Oilprice.com
