The crude oil market closed lower on Friday, extending pressures from the week due to easing concerns over supply risks from the Israel-Hezbollah conflict and the prospect of increased supply in 2025.
Brent crude depreciated by 34 cents or 0.46 per cent yesterday to settle at $72.94 a barrel and the US West Texas Intermediate (WTI) crude contracted by 72 cents or 1.05 per cent to $68.00 per barrel.
For the week, Brent declined by 3.1 per cent while WTI lost 4.8 per cent as trading activity was muted because of the US Thanksgiving public holiday.
Worries about the ceasefire continued to impact the market with Israeli tanks entering a Lebanese border village.
The ceasefire that took effect on Wednesday 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 (IEA) sees the prospect of more than 1 million barrels per day of excess supply, equal to more than 1 per cent of global output.
The Organisation of the Petroleum Exporting Countries (OPEC) and allies such as Russia, collectively known as OPEC+, postponed its next meeting on output policy to December 5 from December 1.
The group said moving the date would avoid a clash with a summit of Gulf Arab countries which is due to be held in Kuwait City on December 1 which several OPEC+ ministers plan to attend.
Prior to this development, OPEC+ was discussing postponing its oil output hike due to start in January for the first quarter of 2025.
Top OPEC+ ministers have held talks ahead of the meeting. Saudi Energy Minister Prince Abdulaziz bin Salman, de facto head of OPEC, on Wednesday had a phone call with Russian Deputy Prime Minister Alexander Novak and Kazakh Energy Minister Almasadam Satkaliyev while in Kazakhstan on an official visit.
Iraq, Saudi Arabia and Russia held talks in Baghdad on Tuesday.
Market analysts warned that the group has to consider the risk of further price weakness amid expectations for robust production from non-OPEC+ producers next year could lead to a crude surplus.
Others also worry that the incoming Donald Trump administration could have a high influence on decision-making.