The price of oil extended its declines, closing its sixth consecutive weekly drop, as the OPEC+ production cuts announced on Thursday failed to dispel market pessimism regarding the increase in global supply.
Brent oil, the international market reference, closed the week on Friday at US$78.88 a barrel. Crude oil initially rose on Thursday as the production cartel’s preliminary agreement would likely help contain a forecast surplus early next year. That optimism quickly faded amid a lack of clarity at the meeting and doubts about whether the cuts would be fully implemented.
US benchmark WTI ended the week down nearly 2% to close at 74.07 a barrel following the OPEC+ rollercoaster, remaining in the range it traded in for much of November.
Prices have moved to a lower range than in previous months as increased supply outside the producer group risks a market surplus in the first quarter.
Meanwhile, Brazil — which has contributed to the increase in global supply — said it would join the OPEC+ alliance’s letter of cooperation next year, but will not participate in any production cuts.