Saudi energy minister Prince Abdulaziz Bin Salman said on Friday that the decision by Opec+ oil producers to delay the start of output increases was based on fundamentals.

"There are so many things going on over the next two months but primarily the decision to delay bringing these barrels to the second quarter is tied to the issue that the first quarter is not a good quarter to bring in volumes as it is known to be a quarter for building stocks," he told CNBC in an interview.

Oil prices fell 1% on Friday and were headed for a weekly loss, as analysts continued to forecast a supply surplus in 2025 despite the Opec+ decision to postpone planned supply increases and extend deep output cuts to the end of 2026.

Brent crude futures were down 72 cents, or 1%, to $71.37 per barrel at 1415 GMT. US West Texas Intermediate crude futures were down 72 cents, or 1.05%, to $67.58 per barrel.

For the week, Brent was on track to fall 2.07%, while WTI was on course for a 0.62% drop.
"Crude oil trades lower for a third day and it highlights what would have happened if Opec+ had decided to go ahead with the production increase," said Ole Hansen, head of commodity strategy at Saxo Bank.

The organisation 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.

"Another delay, which we would not rule out, would leave the market broadly in balance next year. While Opec+'s decision to hold off strengthens fundamentals in the near term, it could be seen as an implicit admission that demand is sluggish," said analysts at HSBC Global Research.

Pressuring prices on Friday, analysts reiterated expectations of a supply surplus next year, although some of them now view a smaller surplus than before.

Bank of America forecasts increasing oil surpluses to drive Brent to average $65 a barrel in 2025, while expecting oil demand growth to rebound to 1 million barrels per day (bpd) next year, the bank said in a note on Friday.

HSBC, meanwhile, now expects a smaller oil market surplus of 0.2 million bpd, from 0.5 million bpd previously, it said in a note.

Brent has largely stayed in a tight range of $70-75 per barrel in the past month, as investors weighed weak demand signals in China and heightened geopolitical risk in the Middle East.

"The general narrative is that the market is stuck in its rather narrow range. While immediate developments might push it out of this range on the upside briefly, the medium-term view remains rather pessimistic," PVM analyst Tamas Varga said.

Morgan Stanley, HSBC cut oil supply forecast, predict $70 Brent after Opec decision: Morgan Stanley and HSBC revised down their expectations for an oil market surplus next year and forecast a Brent price of $70 per barrel, following a decision by Opec+ to delay and slow plans for higher output.

On Thursday, Opec+, which groups the organisation of the Petroleum Exporting Countries and allies including Russia, postponed the start of oil output increases by three months until April.

It also said the cuts would take place until September 2026, nine months later than previously planned.

Morgan Stanley raised its Brent forecast for the second half of 2025 to $70 from $66-68 per barrel, the bank said in a note on Thursday.

The bank lowered its estimate for Opec-9 (Opec members minus Iran, Libya and Venezuela who are exempted from output curbs) production by 400,000 barrels per day (bpd) for 2025, and by 700,000 bpd by the fourth quarter of next year.

It also cut its estimate for Iran's production by about 100,000 bpd through 2025.

"In aggregate, this reduces our estimated surplus in 2025 from 1.3 to 0.8 million bpd in our total liquids balance, and from 0.7 to 0.3 million bpd in our crude-only balance." HSBC maintained its Brent crude price forecast at $70 per barrel for 2025 and beyond, it said in a note on Friday.

It anticipates an oil market surplus of 0.2 million barrels per day in 2025 if Opec+ proceeds with planned production hikes in April. Previously, it expected a surplus of 0.5 million bpd.

Bank of America expects Brent oil prices to average $65 per barrel, assuming no significant increase in Opec+ production volumes in 2025.

"Demand growth has slowed this year and is expected to remain tepid in 2025 too, tipping the market into surplus next year," it said.

The weak demand outlook is the Achilles' heel for Opec+, the bank said, and forecast global oil demand growth averaging 1 million bpd this year and 1.1 million bpd next.

Reuters