Doha, Qatar: Oil prices edged lower on Friday and posted a weekly decline of more than 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 fell 34 cents, or 0.46%, to settle at $72.94 a barrel, noted Al-Attiyah Foundation in its Weekly Energy Market Review.
US West Texas Intermediate crude futures fell 72 cents, or 1.05%, to close at $68. Trading activity was muted because of the US public holiday. For the week, Brent declined 3.0% while WTI lost 4.5%. The ceasefire that took effect on Wednesday between Israel and Hezbollah has reduced oil’s risk premium, sending prices lower, despite accusations of violations by both sides.
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. Meanwhile, 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.
The group has to consider the risk of further price weakness amid the release of currently unwanted barrels, due to expectations for robust production from non-OPEC+ producers could lead to a crude surplus.
Asian spot liquefied natural gas (LNG) prices gained for a third consecutive week to hit a new high for the year as colder weather in the region drove demand. The average LNG price for January delivery into northeast Asia was at $15.10 per million British thermal units (mmBtu), up 3.4% from the previous week, industry sources estimated.