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Oil Slides Further as OPEC+ Fails to Allay Surplus Concerns - BLOOMBERG
(Bloomberg) -- Oil slid for a third day on concerns that OPEC+’s decision to push back the revival of halted production won’t prevent a surplus forming next year.
Brent crude traded below $72 a barrel after closing 0.3% lower on Thursday, with West Texas Intermediate around $68. OPEC and its allies delayed increasing supplies for a third time, opting to start with a modest increase in April, and then unwind the cuts over 18 months, a slower pace than previously planned.
“We doubt that the environment will look more favorable next year for the petro-nations to bring back their oil to the market,” said Norbert Ruecker, head of economics at Julius Baer & Co. Ltd. “Supply growth from the Americas should more than compensate soft global demand growth. China’s consumption is peaking.”
Crude has been confined to a tight range since mid-October, with bullishness from geopolitical developments in the Middle East and Ukraine countered by expectations for a glut in 2025 due to higher output from the Americas and lackluster Chinese demand. Weak global market balances mean there is little scope for the cartel to restore the output it’s been withholding since 2022.
However, Morgan Stanley analysts said OPEC+ had given a “robust indication” that it’s still willing to balance the oil market. “We still estimate a surplus next year, but smaller than before,” they wrote, raising forecasts for the third and fourth quarters to $70, from $68 and $66.
