Oil prices experienced a slight dip on Friday, with Brent crude falling 34 cents to settle at $72.94 a barrel, while U.S. West Texas Intermediate crude futures dropped 72 cents to settle at $68. This decline comes after a week where Brent lost 3.1% and WTI fell by 4.8%.
The easing concerns over supply risks from the Israel-Hezbollah conflict and the anticipation of increased supply in 2025 have contributed to this downward trend in oil prices. Despite the ceasefire and reduced oil risk premium, the conflict has not significantly impacted supply. The International Energy Agency predicts an excess supply of more than 1 million barrels per day in 2025, adding pressure on oil prices.
The OPEC+ group, which includes OPEC members and allies like Russia, is expected to extend production cuts at their upcoming meeting on December 5. The delay in the meeting from December 1 indicates the group’s consideration of potential price weakness and the risk of a crude surplus in the market.
Analysts suggest that Brent could average $74.53 a barrel in 2025, marking a downward revision in price expectations for the seventh consecutive month. This forecast reflects the uncertainty and challenges in the oil market in the coming year.
Overall, the Israel-Hezbollah conflict, alongside the anticipation of increased supply in 2025, is influencing oil prices and market dynamics. Investors and consumers should closely monitor these developments to understand how they may impact their finances and daily lives.
