Mumbai, 06 Dec (Commoditiescontrol): Crude oil prices dipped in early Asian trading on Friday as concerns over weak global demand outweighed OPEC+’s decision to postpone supply increases and extend output cuts.
Brent crude futures edged down by 9 cents, or 0.1%, to $72 per barrel, while U.S. West Texas Intermediate (WTI) crude slipped by 4 cents, or 0.1%, to $68.27 per barrel. For the week, Brent was on track to decline by over 1%, while WTI managed a slight gain of 0.1%.
The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, announced on Thursday a three-month delay to planned output increases, now set to begin in April 2024. Additionally, the group extended its output cuts through the end of 2026, reflecting concerns over the global oil market’s fragility.
Originally, OPEC+ planned to start easing cuts in October 2024. However, a combination of slower-than-expected demand growth, particularly from China, and rising production from non-OPEC members prompted repeated delays.
Analysts believe the extended cuts may lend support to prices in the longer term. Energy consultancy FGE noted that the new strategy reduces OPEC+’s projected output below earlier forecasts by major banks, potentially stabilizing the market.
Barclays energy analyst Amarpreet Singh stated that the extended cuts translate to a 500,000 barrels-per-day reduction in the bank’s forecast for next year, lowering its previous estimate of a 900,000 bpd oil surplus.
Despite these adjustments, crude oil markets remain weighed down by broader economic concerns, including a global demand slowdown and lingering uncertainties surrounding China’s recovery.
(By Commoditiescontrol Bureau: 09820130172)
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