Oil Prices Decline as OPEC+ Extends Production Cuts Amid Weak Demand

Forex - Oil prices fell as the OPEC+ group postponed planned production increases and extended deep production cuts until the end of 2026, focusing on weak demand.
Brent crude oil decreased by 8 cents or 0.11% to $72.01 per barrel. U.S. West Texas Intermediate crude oil fell by 2 cents or 0.03% to $68.28 per barrel.
The Organization of the Petroleum Exporting Countries and its allies postponed the start of oil production increases for three months until April and extended the resolution of cuts by an additional year until the end of 2026. The group, known as OPEC+, is responsible for about half of the world's oil production and had planned to begin resolving cuts from October 2024, but a slowdown in global demand—especially in China—and rising production elsewhere forced multiple delays of the plan.
Mukesh Sahdev, head of oil analysis at Rystad Energy, stated, "The announcement clearly shows the group is concerned about both a potential surplus in supply and compliance with production targets among member countries."
Amarpreet Singh, an energy analyst at Barclays, noted that the net effect of extending supply cuts is a reduction of 500,000 barrels per day in Barclays' expectation of a 900,000-barrel surplus for next year. Singh added, "The immediate price reaction has been muted, likely reflecting limited enthusiasm among market participants that this will be sufficient to counter weak demand, thus the wait-and-see game for an improvement in the demand outlook continues."