Oil falls to its lowest level in 3 weeks after OPEC+ decision as attention turns to weak demand.

Oil prices witnessed a noticeable decline during trading on Friday, causing crude contracts to trade at their lowest levels in three weeks, as attention turns towards expectations of weak global oil demand, following OPEC+'s decision yesterday to postpone scheduled production increases.

Current Oil Prices

In trading, Brent crude futures fell by 1.12% to $71.42 per barrel, while West Texas Intermediate (WTI) crude futures declined by 1.08% to $67.72 per barrel, marking the lowest levels for both crude types since November 18. Both grades are now heading towards weekly losses nearing 1%.

What Affects Oil Movements?

The OPEC+ alliance postponed the start of planned oil production increases for another three months to April instead of January after the conclusion of the joint ministerial committee meeting on Thursday. It also extended the suspension of voluntary production cuts for another year, until the end of 2026.

This decision has led to increasing market expectations that the alliance's choice may be a response to a slowdown in global oil demand, particularly in China, which is still struggling to achieve its relatively low annual growth target. Additionally, production increases from non-OPEC+ countries are contributing to this situation.

Concerns that supply may exceed global demand over the coming year have impacted oil prices, leading to this decline, a warning echoed by the International Energy Agency in its latest reports, as well as the U.S. Energy Information Administration.