- Brent down 0.1%, WTI steady
- Even with OPEC+ restraint, analysts see oil oversupplied in 2025
- Market on watch for US payrolls data impact on rate cut outlook
Dec 6 (Reuters) - Oil prices dipped on Friday, with weak demand in focus after the OPEC+ group postponed planned supply increases and extended deep output cuts to the end of 2026.
Brent crude futures fell 21 cents, or 0.3%, to $71.88 per barrel by 0716 GMT. U.S. West Texas Intermediate crude futures lost 15 cents, or 0.2%, to $68.15 per barrel.
For the week, Brent was on track to drop more than 1%, while WTI hung on to a marginal 0.1% gain.
The Organization of the Petroleum Exporting Countries and its allies on Thursday pushed back the start of oil output rises by three months until April and extended the full unwinding of cuts by a year until the end of 2026.
The group, known as OPEC+ and responsible for about half of the world's oil output, was planning to start unwinding cuts from October 2024, but a slowdown in global demand - especially in China - and rising output elsewhere have forced it to postpone the plan several times.
"Sidelining the surprise drawdown in U.S. crude stockpiles last week and OPEC+ extending plans to ramp up output until September 2026, oil prices eased further amid growing concerns over dented global demand and oversupplied markets," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Concerns that supply will still outstrip demand going into next year weighed on prices further.
Macquarie analysts modelled Saudi Arabian oil production remaining in the low-9 million bpd range in 2025, but expected that even with that supply discipline the market would be oversupplied by more than 1 million bpd.
"Looking into next year, we forecast a heavy surplus, as non-OPEC supply growth is anticipated to meet the below-trend demand growth, lowering the call on OPEC supply and limiting the need for OPEC+ to reverse voluntary cuts," they said in a client note.
Markets were also looking out for the U.S. nonfarm payrolls report due later on Friday, to see whether it would support expectations of a rate cut at the U.S. Federal Reserve's next meeting, and clues on more China fiscal stimulus measures.
The market is pricing in a 72% chance that the Fed will deliver a 25-basis-point rate cut when it meets on Dec. 17-18, up from 66.5% a week ago, CME FedWatch tool showed.
OANDA senior market analyst Kelvin Wong said the OPEC+ delay had already been factored into the market and the next catalyst would likely come from the demand side, with further Chinese fiscal stimulus measures next year potentially countering the adverse effect of higher U.S. trade tariffs.
China is scheduled to hold a central economic working conference on Dec. 11-12.
Reporting by Shariq Khan in New York and Trixie Yap in Singapore; Editing by Sonali Paul, Kirsten Donovan
Source: Reuters