Oil prices fell on Friday, extending a weekly decline of over 3%, as easing concerns over supply disruptions from the Israel-Hezbollah conflict and expectations of increased global oil supply in 2025 pressured the market. Brent crude dropped by 34 cents, or 0.46%, closing at $72.94 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 72 cents, or 1.05%, settling at $68, following the Thanksgiving holiday. For the week, Brent lost 3.1%, and WTI dropped 4.8%.
The market saw reduced trading activity due to the U.S. public holiday, and the risk premium associated with the Middle East conflict has diminished after a ceasefire took effect earlier in the week. Despite continued tension, no significant supply disruptions have occurred. The International Energy Agency (IEA) predicts more than 1 million barrels per day of excess supply in 2025, suggesting an easing in oil market tightness.
As OPEC+ prepares to meet in December, market watchers anticipate the group will extend its output cuts to mitigate the pressure of growing production outside of the cartel. Analysts suggest oil prices will likely average lower in 2025 than in 2024 due to these factors, with Brent crude expected to hover around $74.53 a barrel next year, according to a Reuters poll.
